The Hindu Business Line : Clean move

Shortly after crude prices had scaled a dizzy height of $135, the UK-headquartered Ultra Motor Co unveiled a project declaring Stuttgart in Germany as the world’s first LEV (Light Electric Vehicle) city. The occasion was World Environment Day (June 5), and Stuttgart was chosen as “historically it has been the home of automobile innovations. Some of the very first automobiles in the world were developed and commercialised here, and to continue its innovative leg acy we chose this city,” says Joe Bowman, CEO of Ultra Motor Co.

But he is most excited about growth prospects in India, “our fastest growing market that represents 50 per cent of our business today, and where we are pioneering some of the leading technologies in the field.”

An LEV has a system of batteries that can be electrically charged, and the main concern of consumers is the range of the vehicle. Ultra Motors has just launched in the Indian market its longest-range scooter called ‘Marathon’. “This can travel up to 100 km on a single charge and India is the first market to get this product. The good news is that this vehicle can be charged at any electrical outlet; you can plug it at your home, at the coffee shop or your workplace, and you can get 80 per cent of the charge in the first two hours,” says Bowman.

The remaining 20 per cent charge requires six hours. So the consumer has the option to go in for a quick charge or an overnight charge. And, points out Deba Goshal, Ultra Motor India’s Marketing Director, LEV users in India are getting into the habit of overnight charging of their vehicles, “just as you now do with your mobile phones”.

He adds that in 2007-08, LEVs got about 10 per cent of the Indian scooter market share; “1.1 lakh of these vehicles were bought by Indian consumers, from a total of over 1 million scooters sold last year.” Ultra Motors, which assembles its LEVs in India, hopes to sell about 60,000 units in 2008-09 in a market projected to be around 2.4 lakh units. In 2009-10, he estimates the Indian market for LEVs at 4.5 lakh.

The pan-Indian average for the daily commuting distance of a scooter is about 30 km. The obvious reason a consumer chooses an electric vehicle is to save cost, both upfront and while using it. The cost of Ultra Motor LEVs in India is about Rs 28,000-34,000. “The upfront capital cost is always going to be lower than a combustion engine product. But more important for the consumer is operating cost, which depending on where you are, can be as low as 10 per cent, as it is in India,” says Bowman.

In the capital cost there is a saving of about 25 per cent, says Goshal, and the battery configurations are different too in different markets. “India and Asia being price-sensitive markets, and more oriented towards “scooter” designs, use SLA (sealed lead acid) batteries, which are heavier and more voluminous. But they give a good range, such as the 100 km given by the Marathon launched in India this June. European and US markets prefer leaner/slimmer designs, hence the lighter and smaller Lithium Ion batteries are used in these.”

India, not China

Bowman is more interested in the Indian, rather than the Chinese market, “because China has already grown and it’s a local market where domestic players are fighting it out. So there won’t be any further growth there; but we’ll see growth in India, South East Asia, Europe and the US.”

India is exciting because “we’re seeing more and more cars on the road, and thanks to the brilliant engineering of Tata we’re going to see the Nano enter the market and put even more cars on the road.” This would result in a higher fuel bill as well as emission of more greenhouse gases accelerating climate change.

Upbeat about the new transportation solution his company is offering and positive that it will catch on, he says, “In the US and Europe consumers are shocked, paralysed; in the US gas has crossed $4 a gallon; in India petrol is around Rs 55 and fuel continues to be subsidised. All these negative trends will have an adverse impact on economic development and people’s lives, and electric personal mobility is a great way to solve this problem.”

He admits that consumers are hesitant to try out a new category of transport and concerned about the battery running out and no place to charge it. “So in an effort to drive mass adoption of LEVs across the world we’ve developed a solution for cities that helps get cars off the road, fights climate change, brings down energy cost that negatively affects the economy and reduces traffic congestion. And we are calling it LEV city.”

A charging network

Stuttgart is the first, and provides LEV users a charging station every 200 metres… “Just like a mobile network, this is a network where people can charge their vehicles, where there will also be a fleet of public vehicles available for renting. So you have a smart card and become a member in the same way you become a mobile phone subscriber. You swipe your card and put your vehicle for charging while you go to office, for a cup of coffee, or shopping. It’s a convenient place for parking, charging and a new form of public transportation that is cost-efficient, fast and clean,” says Bowman.

He adds, “We’re not stopping here and are already in discussion with over a dozen Western European cities and a few Indian cities because we are on an international mission to implant charging station networks for LEVs in every possible city in the world.”

Ghosal adds that last year the LEV category got a decent exposure in south and west India. “Central India and North India still lack that penetration, but it’s a good start and we are very positive the market for LEVs will only grow here.”

Bowman of course is engaged in “very aggressive plans to build a global brand for his LEVs. “There are 50 cities in Europe, each with a population above 500,000, which need a solution like this.” A few of the smaller cities in India are interested too “because there are clear benefits. They are looking not only to cut emissions but also get cars off the roads to ease traffic congestion and provide clean transportation.

In Stuttgart, clean transportation two-wheelers enjoy about 8 per cent of market share of all transportation. “They want to take this to 20 per cent in three years, and that can be done only through an LEV personal mobility network.”

So how long before Ultra Motors looks at a battery-operated car?

“I don’t believe that cars — especially personally owned cars — are going to play a major role in transportation in the 21st century,” says the man who has been visiting India for eight years and noticing the explosion in the number of cars. “This is probably going to continue as you have pent-up demand. As the economy grows, people with more money have different aspirations including freedom of mobility and the first step is to go to a car. But you haven’t seen what Europe has seen.”

And those are problems associated with the cars on the road and “I think India has a great opportunity to leapfrog, because there are only so many roads. Of course, as a company we are always open to innovations but I believe the LEVs are going to play a more dominant role in the 21st century.”

Bowman gives anecdotal evidence to show that crude above $135 is really hurting and “people are driving less cause it is costing more to do so. On the Memorial Day weekend in the US, a big holiday, people love to go on their motorboats. But this year if you went out on your motorboat, or your sailboat, as our chairman Joe Santana did, you’d have seen an amazing thing. There were no boats!”

As it costs $300 an hour to go on an average-size motorboat, “many people decided it was not worth it. So there were barely 10 per cent of boats out there. And the same thing happened with driving during the same weekend, when people normally drive to the countryside. So it is clearly a crisis.

At such a time, if there is a viable alternative and awareness increases, the LEV market will explode not only in India but every country in the world,” is his cheerful projection for his business.

Response may be sent to rasheeda@thehindu.co.in

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