Blue Energy Motors, a Mumbai-based outfit, is set to disrupt the market for two million heavy-duty trucks running on diesel and petrol in the case of routes under 500 km by transforming them into electric.
Blue Energy Motors, a Mumbai-based outfit, is set to disrupt the market for two million heavy-duty trucks running on diesel and petrol in the case of routes under 500 km by transforming them into electric.
The company, which has Essar, Iveco, and Nikhil Kamath as investors, has put together a two-pronged strategy to build the market, which includes creating its own small "battery-swapping stations" in Indian highways at a regular interval of 150 km to resolve the issue of range anxiety and the long wait at charging stations.
Secondly, it is offering, for the first time, customers "energy as a service", under which a vehicle can be sold without the battery, sharply bringing down the gap between its upfront price and that of a diesel-powered truck.
Instead, customers will pay for the new service, based on the operating cost per km.
Anirudh Bhuwalka, founder and managing director, Blue Energy, said: "There are only 350 electric trucks for the short haul in a two-million market, dominated by diesel. We have just begun supplying the trucks and this year we have seen the inflexion point needed for customers to shift from diesel to electric."
The company is investing Rs 3,500 crore, which will include having, in 36 months, around 1,200 swapping stations in 200 locations in more than 38 national highways.
In the same period it is planning to churn out over 30,000 electric trucks.
Bhuwalka said the market scenario was changing in favour of electric vehicles. For instance, prices of LFP (lithium iron phosphate) batteries, used in electric trucks, in the past few months fell 50 per cent. And they account for 60 per cent of the cost of the vehicle. That has led to the cost of producing electric trucks substantially going down.
Next, electricity prices are stable and are expected to fall with the advent of solar even while diesel prices go up.
However, the key is bringing down the upfront cost of an electric truck closer to a diesel-powered vehicle.
"End users will not pay a premium to go green because its capital cost is three times that of an electric vehicle, but we have cracked the code."
Bhuwalka said typically a diesel truck was priced at Rs 35 lakh-37 lakh while an electric battery-powered alternative was Rs 95 lakh. But when sold without the battery, the price is down to Rs 55 lakh. And with the operating cost per kilometre lower by 5-10 per cent over diesel, it offers attractive return on investment to fleet owners.
Not only that, the company expects that battery prices will fall 10 per cent in the next few years, which will nearly neutralise the upfront cost altogether.
The company got into the business by manufacturing trucks running on liquefied natural gas (LNG) for distances of over 500 km and has a fleet of over 1,000 operating across major industrial hubs.
It is planning to offer both the options -- electric and LNG -- to customers.
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