October 28, 2009 The Tiny Leader of the Pack By VIKAS BAJAJ NY Times
http://www.nytimes.com/2009/10/28/business/global/28reva.html?_r=1&ref=business&pagewanted=print BANGALORE, India — Depending on whom you ask, this tiny company is either the next big thing in automobiles, or a maker of glorified golf carts. What is indisputable is that as the whole automotive world seems to be racing suddenly toward the age of electricity, the Reva Electric Car Company is in the lead, ahead of better-known local competitors like Tata Motors and global giants like General Motors and Toyota. Daimler and Toyota are supposed to start trials of electric versions of the Smart Car and the Prius, respectively, by the end of the year. The Nissan Leaf will come out next year, as will the Chevy Volt. And the Obama administration is committing billions of taxpayer dollars to loans to help companies produce alternative vehicles, including hybrids and all-electric cars. Vice President Joseph R. Biden Jr. was in Wilmington, Del., on Tuesday at a defunct G.M. plant that Fisker Automotive, backed by a $528.7 million government loan, will refurbish and use to make hybrids. But years before the sleek Tesla Roadster hugged California highways or General Motors unveiled the Chevrolet Volt, Chetan Kumar Maini was making and selling stubby electric vehicles turned out by a nondescript factory here. Reva has more all-electric vehicles on the road than any other company, but it still has a long haul before it can make the vehicles marketable for the masses. Last month, the company won an important stamp of approval when General Motors said it would use Reva’s technology in the electric version of its Chevrolet Spark, a small car whose conventional gasoline version G.M. sells here already. The electric version of the Spark is expected to go on sale in India by the end of next year, according to G.M. officials. Reva’s technology is “second to none,” said Karl Slym, president and managing director of G.M. India, adding that Reva’s appeal came from its drive train, the collection of components that move the car, which is easily installed in different vehicles and works with various batteries. G.M.’s vote of confidence is a big boost for the privately held company, which has been making vehicles for eight years, but has sold only a few more than 3,000 cars and has not yet turned a profit. By contrast, big Indian automakers sell tens of thousands of cars each month. But now Reva’s moment may have arrived. The company is retiring its only model, known here as the Reva i and in Britain as the G-Wiz — and mocked for its small size, boxy shape and lack of speed. The vehicle does not even qualify as an automobile but is called a quadracycle, a slower, four-wheeled vehicle similar to an all-terrain vehicle, which is not required to meet car safety standards in countries like Britain. Reva’s new model, the NXR, will comply with European safety regulations, seat four and travel up to 100 miles on a full battery charge, at speeds of up to 65 kilometers an hour — what is known in the industry as a city car. “I have been doing this for 15 years, and I have never seen everything come together like I have” now, said Mr. Maini, the 39-year-old vice chairman and chief technology officer of Reva. The company is jointly owned by his family; AEV L.L.C., a small technology company based near Los Angeles; and two venture capital firms. Mr. Maini also said the company was in talks to franchise production of the NXR in New York State to Bannon Automotive, a company based in Long Island. Bannon is negotiating with local and state officials and lining up financing, Mr. Maini said, adding that once a deal was struck, a plant could be up and running in 12 months. Companies like G.M. and Nissan are already spending billions to develop electric cars. Carlos Ghosn, chief executive of Nissan and Renault, said recently that electric vehicles would make up 10 percent of all cars sold by 2020. But before that can happen, both electric cars and their batteries have to become more efficient and cheaper, a whole battery-charging station infrastructure has to be created, and consumers have to want the cars, which cost considerably more than gasoline-powered vehicles. In addition to these challenges, Mr. Maini’s company has to grow from being a maker of niche vehicles for early adopters into a producer of mass-market cars. “The Mainis are certainly good guys, but I don’t think they have the resources to make that happen,” said Rishikesha T. Krishnan, a professor of corporate strategy at the Indian Institute of Management in Bangalore. They have to “align themselves with a bigger player.” Reva officials agree that they need partners and they are trying to develop three businesses: building cars under the Reva brand; franchising production of Reva cars to other manufacturers like Bannon; and licensing Reva technology to automakers like G.M. The company also says it believes that its coming cars will be much more enticing. It has such faith in the NXR that it is building a factory that can produce 30,000 cars a year. The company plans to release one new model every year; it has a sporty coupe, the NXG, ready to be released in 2011. “It was very clear to the management and the board that we have to do something truly game-changing, and hopefully that’s what we have done with the new design,” said Mohanjit Jolly, a Reva board member and the executive director at Draper Fisher Jurvetson, a venture capital firm based in Silicon Valley that has invested in both Reva and Tesla Motors. In many ways, Reva is the opposite of Tesla, a Silicon Valley company that has grabbed the limelight with its high-performance electric sports cars. Whereas Tesla’s cars are fast and expensive — in the case of the Tesla Roadster, $101,500 — Reva’s vehicles are small, slow and, by electric car standards, cheap. And Reva’s compound on the outskirts of Bangalore is a far cry from the Bay Area. To get to it, visitors must drive through dusty, potholed streets in an old industrial area south of the city. “If Tesla is on one end producing cars to compete with Ferrari, we are on the other end,” said R. Chandramouli, who heads sales and marketing at Reva. “We believe in really small cars.” Mr. Maini said electric cars have to be small and affordable to succeed in places like India and Europe, where most car trips are short and involve stop-and-go driving, unlike in the United States where commuters can drive 50 miles or more a day, mostly on highways. The NXR, which is about a foot and a half shorter than the Mini Cooper, will come in two variations. In Europe, the higher-end model will sell for about 15,000 euros, or $22,000, not including batteries, which the company will lease for a monthly fee. By contrast, Tesla’s Model S sedan will cost $49,900 after a $7,500 tax rebate. That car will seat five adults and two children and have a range of 300 miles. Tesla is taking reservations for the car, but deliveries will start in 2011. It has sold nearly 900 of its Roadster sports cars. If all goes according to plan — a big if — Reva, which is named after Mr. Maini’s mother, should turn a profit sometime next year, he said. For him, that milestone would be the culmination of a long journey. His love for motors began early. He built remote-controlled cars and planes when he was 10, and motorized go-carts as a teenager. Because specialized components were hard to come by in India, he asked his father’s friends to buy spare parts when they traveled abroad. His well-to-do business family supported him then and continues to finance him today. “When I was 11 or 12, I had a hobby room that was bigger than the room where the three of us slept at night,” he said, referring to the room he shared with his two older brothers. “I had my own lathe and mill.” Mr. Maini studied mechanical engineering at the University of Michigan, where he was on a team that built an award-winning solar car in 1990, and then at Stanford. After working in California for a few years at AEV, he returned to Bangalore in the late 1990s to start Reva as a joint venture between his family and AEV. (His family owns two other companies that make auto parts, golf carts and forklifts.) The Maini family and its partners have invested more than $50 million, and in-kind services like office space, in Reva. Perhaps because of his long experience with cars, Mr. Maini, does not come across as a wide-eyed technology evangelist. He does not brag excessively or predict the death of the internal-combustion engine like other electric-car entrepreneurs. “Electrics are not going to overnight replace gasoline engines,” he said. “But they could be a large portion of” cars sold in the next 10 years. Reva is betting on it. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
