Euler Motors sees the growth of last-mile delivery growth as a boon. The company aims to enter into bigger and heavier commercial vehicle segments over the long term.
The last mile-delivery has been witnessing a rapid surge in demand and growth in the last few years, accelerated during the country-wide lockdown, due to the factors such as fear of Covid-19 contamination, Work-from-Home etc. Electric vehicles, especially the small cargo carriers are seeing this as a boon for further and faster growth in India, both in urban, semi-urban or rural areas. Euler Motors is one of the dedicated players in electric-powered light commercial vehicles in India.
North-East Indian markets being one of the major spaces for last-mile delivery operators can open a major business opportunity for the electric cargo carriers. What does Euler Motors say about this opportunity? What are their product and business expansion strategies? What does it think about the recent Delhi government policies about retro fitment of old diesel vehicles into electric vehicles and allowing electric light commercial vehicles into 250 roads during No Entry hours?
Autofintechs had a conversation with Saurav Kumar, Founder and CEO of Euler Motors.
Edited excerpts are below.
Q. What’s happening in Euler Motors now in terms of products and all?
We started in 2018 and we are still continuing it for over three years in the electric vehicle segment. We sell three-wheeler cargo and soon we will get into four-wheeler as well. The last three-wheeler we launched is Euler HiLoad which is the most powerful three-wheeler electric cargo so far in the ICE engine or EV, which came to market on 27th October.
Q. Is that the highest payload capacity you mean? Also, any developments with the last mile deliveries?
First of all, yes. the payload capacity is highest in both ICE and EV. It is a transition to EV and a transition to sustainable mobility in India. So, capacity is not highest in the EV segment but anything like CNG, petrol or diesel.
With that, we have received the highest number of orders for this as well, approximately 2500 orders from Flipkart, Bigbasket, Udaan, Ecom express. And we have started our production. Currently, we are producing 100 units per month. But we are trying our best to fulfil the order book soon. We believe, this number will become 4,500 units within the next month. So, this 4,500 is a pre-launch figure and we are going to increase our production from 100 to 1,000 per month. And after the launch, we have already received an order of 1,000 vehicles from MoEVing.
This is our journey so far, in between we are raising capital as well. Cumulatively we have raised $21 million so far, out of which $10 million from QRG investments and previous investors included Blue Venture. This will be used mostly in production. Also, we are mainly based in Delhi-NCR. We are planning for expansion at Kolkata, Pune, Ahmedabad. We have roughly deployed 200 charging stations in Delhi-NCR, also have plans to expand both fast and slow charging facilities in other parts of India.
Q. In terms of products, you are manufacturing cargo vehicles but do you have a plan to move to the passenger vehicle segment, both in four-wheeler or two-wheeler?
Immediately, we have no plan to invest in the personal mobility segment, be it two-wheeler or four-wheeler. Fundamentally, when we started our journey, our main focus was to electrify the commercial mobilities and we started with a three-wheeler. Commercial four-wheelers will be our next product. Hence, commercial vehicles are the main focus, rather than producing personal or private vehicles. At least, not in the short term we think of that.
Q. We see the EV penetration in small cargo carriers but in the larger cargo carriers or heavier cargo carriers, there is no such penetration so far. The major players are not dedicating themselves to the segment. Maybe a few startups are coming into the market but they are pretty minuscule in terms of sales or products as well. So, do you see this as an opportunity?
For pickups, we have 3.5 GBW. But for the medium and heavy MXEV segment depends on the Total Cost of Ownership (TCO). In heavier trucks, the GBW that they have to carry, TCO time period that is TCO compared to a diesel variant that becomes 10 to 15 years. That means even if somebody takes the transition now, we will not see the impact immediately. Whereas, for three-wheeler pickups, the subsidy will be realized within a year or two only.
So, the transition is at the first place in this case. This means the small carriers will start the transition first, then eventually the medium or heavy commercial vehicles. In other cases also, we start with smaller segments, then move to bigger ones. It also depends on how the technology evolves.
Q. So, right now you will focus on small cargos only but later you may move to heavy and medium electric cargo vehicles?
Yes. Our target is to electrify the commercial segment. Maybe in 8 to 10 years, we can think of it. But we will bring the smaller ones first, then the larger ones.
Q. From consumers’ perspective, people these days love to have SUVs, considering practicality and road conditions in India. Do you think it will be encouraging to introduce electric pickup trucks as a personal mobility option in India instead of commercial purposes, just like the US market does, as with this strategy the consumers will get access to an electric UV and that can be used for off-roading?
In my limited understanding, I think there is a bit of difference in the kind of expectation for personal mobility vs commercial mobility. I think, one of the observations that I made while developing HiLoad, and the other cargos, is that the people around India have a lot of questions regarding the product itself. Is EV not as powerful as its ICE counterpart? That’s why when personal pickup trucks will come to India, the questions will be like high torque, top speed, acceleration, good range etc. And the commercial usage of personal vehicles like taxis, pickup buses etc.
Q. Delhi government recently announced that they will be allowing the electric light commercial vehicles to enter around 250 roads during no entry hours. How do you see this strategy encouraging fleet operators and commercial vehicle aggregators to adopt EVs?
I remember the draft policy in 2018, where they had said that they would remove no entry for the zero-emission electric vehicles over the next two years. The central government has given a subsidy at the central level, Delhi government gave the subsidy at the state level. The last pledge is when your vehicle is running on the ground, you can see the operational benefit. Like for a driver, driving from morning to evening, no entry was restricting the opportunity for them around 7 or 8 to 10 in the morning and then in the evening 5 to 7 or 8 around. During these hours, they could not do any movement but suddenly, for this, they could earn more.
If you look at Gurgaon, Faridabad and peripheral roads, we will actually see a very large number of commercial three-wheeler cargo. In the end, the push is more for electricity. Because it is an opportunity to earn more and save more. This transition is important and I don’t think you have to give them anything else. All policies until implemented at the ground level, cannot be of use and with this removal of no entry and all other ground-level implementations, operationally it becomes better.
Q. Delhi government also announced that they are allowing retrofitting old diesel vehicles to electric vehicles. How do you see this benefitting commercial vehicle in Delhi-NCR? Also, how do you see this creating a new business ecosystem for Euler Motors?
What my personal observation is, so far right now we need as many electric vehicles as possible. This is a transition for EVs. However, we need to check the quality and life of the vehicle, where the transition needs to happen. The customer also needs to know the electric vehicle and its performance. I think retrofit is a good step. The certification of safety, performance and all as combined vehicles rather than a component element. I remember when the CNG transition was going, the safety things needed to be looked at. A complete vehicle goes through a test, a whole-body kind of a test.
Q. Do you have any plan to expand your production to other cities in India? Especially in the North-Eastern region or maybe in Kolkata in the light commercial vehicle segments? As last-mile service providers are also aiming for expansion here, do you see this as an opportunity for Euler Motors to set up a new production base?
Currently, we are speaking to a few customers headquartered in Kolkata. We have plans to move to top tier-one cities and tier two like Kolkata, Bangalore, Chennai, Ahmedabad, Pune etc. But before that, we need to check how customers are reacting on the last-mile deliveries, EVs in general. Then we will look at the government policies and suppliers there.
Q. What is your plan for setting up new production facilities anywhere in the country?
To be very honest, currently, we are open. We are pushing our retail expansion. We have already opened our experience centres in Gurgaon and Delhi. Starting from there we will expand to other cities of India. As I said, we have raised $10 million and our launches are coming up from 15th January onward. This expansion will take place within six to nine months to the next two years. Also, we have plans to expand the charging stations network. To accelerate this transition, this is a very important step.
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