The country's largest automotive battery maker, Exide Industries Ltd., has forayed into the manufacture of e-rickshaws. The new vertical, which the company launched on Wednesday, is likely to add nearly ₹120 crore to its topline in the first full year of operations (in FY-21).
E-rickshaws will be sold under the brand ‘Exide Neo’ and across markets such as West Bengal, Uttar Pradesh, North Eas and the National Capital Region.
According to Gautam Chatterjee, Managing Director and CEO, Exide Industries, this is the first forward integration project that the company has taken up in recent times. An assembly line with an annual capacity of 15,000 units has come up at Dankuni (Hooghly), some 20 km from Kolkata. He did not share investment details.
While most of the components - apart from battery (which is 40 per cent the cost for an e-rickshaw at a factory level) - are sourced from China, plans are afoot to increase indigenisation. At present, the e-rickshaws made by Exide have 15-20 per cent component indigenisation.
“We have been working with several e-rickshaw drivers when it came to developing batteries. Then we went ahead with the forward integration. It is a calculated risk that we are taking in the hope that there will be more demand in the coming days,” Chatterjee said on the sidelines of the launch.
Incidentally, the ₹10,500-crore Exide was amongst the first branded automotive battery makers to have products exclusively for the e-rickshaw sector.
Market sources say there are two billion e-rickshaws that ply across in India; most of which are bought in from the unorganised players. The segment is witnessing a 10 per cent-odd growth annually with 100,000-150,000 new vehicles being added in the segment. Amongst the organised players, Mahindra continues to be a dominant one with nearly 10 per cent market share. TVS is the other major organised player.
Targeting 10,000 unit sales
“We are targeting 10,000 unit sales in the first year of operations. That should lead to an addition of ₹120 crore to our top-line,” Arun Mittal, Director Automotive, Exide Industries, said.
The company would also explore the possibility of having e-rickshaws with lithium-ion batteries.
According to Exide’s MD, Chatterjee, the company’s lithium-ion battery manufacturing facility is expected to start production December onwards. The facility is located in Gujarat.
The company has formed a 75:25 joint venture with Swiss firm ‘Leclanche’ and has already invested around ₹100 crore. Another ₹100 crore is expected by the end of March 2020.
Chatterjee maintained that lithium-ion batteries are costly and plans are also on to introduce a leasing / financing model so that e-rickshaw users can adopt to these, if required.
However, e-vehicles do not pose a threat to its core automotive battery business. “The fact remains that electric cars would also need lead acid batteries. The dashboard, power windows, power steering, all these will be run by lead acid batteries. In the electric vehicles, when they come, the lithium batteries will replace the engine. But the lead acid batteries will continue to remain as auxiliary batteries. That way the emergence of EVs will not dent the future of a company like ours,” he said.
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