“You are never too young to start. ” says Chetan Maini and Tarun Mehta. While the former is the founder of REVA ,India’s first electric car, the latter is the CEO of Ather Energy which manufactures smart electric scooters. To add more to this panel came in Dr. Ashok Jhunjhunwala, professor in electrical engineering IIT Madras.
Go on and read ahead to find out what this trio have to say about Electric vehicles, the next dot com bubble.
The automotive industry is changing rapidly, much more quickly than at any point in the last 20 years. There’s a major shift towards green technologies and increased fuel economy, driven by both regulations and consumer demand. Electric Vehicles have gained importance as the world looks for ways to reduce the carbon pollution and oil dependency that fuel dangerous climate change. In a way, auto industry is embracing electric vehicles.
Reports show that the industry is growing at about 20-30 % per annum. With a 30% growth rate, by 2050 ,may be 5% of the worlds vehicles will be electrical. So what sort of dream are we chasing. Why are we putting up so much energy and effort to chase 5% of the worlds transportation system? The glitch is no new industry grows in linearly, these reports do not capture the exponential growth rate of the industry across the years. With an exponential growth of 80-100 per annum for ten years, transportation of entire continent changes in 10 years. People who are able to understand what this growth means are able to capitalize on this market.
One key point is that it is not just the vehicles that are going to change but the whole ecosystem. There were sellers and buyers previously also in the market ,but once the smart phones and internet became easily accessible , Flipkart and Amazon could capitalize on this market connecting sellers and buyers. The same will be the case with electric vehicles. We will need factories worth billions of dollars to sustain this growth in electric vehicles. Do you see any of the start-ups talking about manufacturing lithium ion cells? That is a massive $2 trillion industry growing. It is as big as the entire internet boom that has happened over past 20 years and yet surprisingly no one is talking about it. This is a big opportunity entrepreneurs can capitalize on.
The main reason for the improvement of this electric vehicles segment in recent years is that the energy density of batteries is increasing. It has increased by 500% from that of 2001-2002. This has led to significant decrease in cost from $1200 per KWh to $150 per KWh. And since battery is the key component of an electric vehicle, it has led to significant decrease in the cost of vehicles. This is the reason why electric vehicles are making sense globally. Another driving factor is being eco-friendly, in the present pollution conscious world this has become one of the key selling factors.
Another industry that can develop on this is the charging infrastructures. There is a huge opportunity coming up in this segment. “We at Ather are trying to solve this problem on our own at least to get our product kick started and get the market moving. There is no way we can scale up to the actual requirement of charging infrastructure for the entire country” says Tarun. There may be a requirement of as many as 1 million charging points. Micro entrepreneurs can come up with ideas like setting up charging points similar to the telephone booths. That is a low tech and pure business model innovation. There is a huge opportunity there. Other subsidiary industries include analysis of the live data fed by these smart vehicles and manufacturing of highly efficient batteries.
So be smart, prognosticate and clasp the opportunity. Look for the opportunity gap and fit yourself in, because it’s not just electric vehicles, it’s the whole eco system.