Home > TOP STORY > With Ratan Tata’s backing, Ampere bets on revival in India’s e-vehicles market


With Ratan Tata’s backing, Ampere bets on revival in India’s e-vehicles market

VCCIrcle_Ampere_ElectricComing out of an exceptionally bad year for electric vehicles market in India, Coimbatore-headquartered Ampere Vehicles Pvt Ltd feels the worst is behind it.

It has just bagged money and a huge endorsement for the business coming through a personal investment from Ratan Tata, chairman emeritus of Tata Sons and the former head of the conglomerate that created the world’s cheapest car Nano.

The company, which claims to have sold 18,320 electronic vehicles since inception in 2008, is now gunning for 6,000 vehicle sales this year and aims to generate revenue of Rs 14 crore for the year ending March 31, 2016, says founder Hemalatha Annamalai.

Cumulatively, the company has generated Rs 40 crore since establishing operations eight years ago. In this period, it sold around 10,000 e-cycles, 8,000 e-scooters and 320 customised industrial vehicles such as electric load carriers and special purpose vehicles for textile mills.

Hemalatha did not disclose exact figures for 2014-15, which was a tough year for the entire industry. However, the firm is estimated to have sold under 1,200 vehicles last year which means that it is eyeing five-fold growth this year.

So what really caught Tata’s eye?

“April 2015 was the inflection point for the electric vehicle in India but the tipping point will be in the next 12 months. Tata particularly liked how our vehicles empower rural folks at affordable running costs,” Hemalatha said.

In April, the government formally launched the FAME India scheme offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 138,000 for cars.

FAME India – Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India – is a part of the National Electric Mobility Mission Plan (NEMMP). The scheme envisages Rs 795 crore support in the first two fiscals starting with the current year.

As part of this, the government will reimburse the manufacturers for selling e-vehicle at a cheaper price point to make them more competitive compared with conventional fuel powered vehicles. E-vehicles are otherwise relatively pricier.

Initial statistics seem to indicate that the incentive scheme is working. The electric vehicle industry saw a 25 percent increase in sales for the first quarter ended June 30, data from the Society of Manufacturers of Electric Vehicles (SMEV) shows.

Startups_Scan_Ampere

E-vehicle makers sold a total of 5,000 units as compared to 4,000 in the previous sequential quarter, SMEV said.

Ampere, which sells electric vehicles and special purpose vehicles for the differently abled among others, will use the money invested by Tata to scale up operations and expand its talent pool. It sells products under brand names such as Angel, Bobo, Prince and V60 in Tamil Nadu, Karnataka and Andhra Pradesh.

Hemalatha believes that electric vehicles which use lead acid batteries cannot be seen as a replacement to petrol-based vehicles. “E-vehicles are suitable for point to point commuting and we looks to penetrate into the tier two and tier three segments besides catering to farmers in villages who could ideally use these to transport goods and grains. If lithium battery prices were to come down, e‐vehicles would become a good alternative for long distance drives,” she added.

The e-vehicles industry went through a challenging period post 2010. Delay in launching the ambitious NEMMP programme, unveiled two years ago by the previous government, was a major deterrent. NEMMP sought to provide incentives to ensure 6-7 million electric vehicles on Indian roads by 2020. Sales of electric vehicles in the country are estimated to have declined by a fifth to around 16,000 units in the year ended March 31, 2015 over the previous year. It is a far cry from sales milestone of 100,000 units as recently as four years ago.

The range of battery powering the vehicles, and thereby the distance such vehicles can travel at one charge, has always been a problem for e-vehicles. Lack of institutional charging points like the developed markets, also restricted adoption of e-vehicles in the country. Ampere, however, does not see these are major constraints.

“Our chargers can run on standard home-socket (5 Amps socket) just like charging a mobile phone. The power consumption for charging is very low,” said Hemalatha.

However, in a country where power supply itself is a problem, even home powered e-vehicle packs face challenges.

The company says that community based solar charging must be encouraged and developers must provide for this while planning their projects.

‘Prevailing myths’ that e-vehicles have no speed, cannot climb gradients and will stop at the event of a downpour have also hindered sales.

Hemalatha believes that her company’s revenue pattern has been similar to disruptive startups in the Chinese e-bike industry. The Chinese e-bikes industry grew from less than 40,000 units annually in 2000 to 32 million in 2014.

Globally, the bulk of electric two wheeler sales is concentrated in China.

Hemalatha, a computer software engineer from Government College of Technology (Coimbatore) and an MBA from Royal Melbourne Institute of Technology (Australia), started Ampere in 2008. She pooled in personal savings of around Rs 10 crore to kick-start the venture.

In 2013, Ampere had raised about Rs 20 crore from India’s Forum Synergies and Spain’s Axon Capital. Ampere seeks to secure another Rs 20 crore within the next three months to scale up operations. The company has appointed RiverBridge Investment Advisors for this round of funding.

The recent activity in the industry may help its cause. Recently, another electric vehicle startup Ather secured $12 million from Tiger Global.

Add to it the heft of Ratan Tata, funding is the least of the worries for Ampere.

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