Electric Car Reva

Introduction
In May 2001, Reva1, an electric car, was launched in Bangalore (Karnataka) by the
city-based Reva Electric Car Company (RECC). Reva was claimed to be India's first
zero-polluting, battery-driven car with a running cost of just Rs 0.40 per km.2 One
of the first electric cars in the world to go in for mass production, Reva was slated
to become the cheapest car in India.
It was priced at about Rs 0.2 million and the first ten cars were delivered to
customers in July 2001. Reva generated a lot of excitement in the Indian
automobile industry since it offered many significant advantages over
conventional cars.
Its low running cost, gearless driving, dent proof body material and other state-ofthe-art technologies made it an alternative package. Reva was soon being
compared with India's largest selling car Maruti 800. Though available at almost
the same price as Reva, Maruti's running cost was almost four times higher than
that of Reva.
The car was also being seen as the answer to reducing the increasing pollution
levels due to automobiles. Media reports claimed that Reva was all set to bring
about a revolution in the Indian passenger car industry. Some analysts claimed
that the electric car would create an entire new market and attract small families
in hordes. Hormazd Sorabjee, auto analyst and editor, Autocar India, said, "If
Reva's claim of keeping the running costs at Rs 0.40 per km is achieved, the car
will be attractive to cost-conscious consumers who are ready to compromise on
the limitations of an electric car."
The Indian Passenger Car Industry
Till the late 1970s, the Indian passenger car industry offered limited choice to the
customers, with only two popular models in the form of Hindustan Motors' (HM)
Ambassador and Premier Automobiles' (PAL) Padmini. The government not only

controlled the price mechanism in the industry, but the entry of foreign players
was also strictly regulated.
The situation, however, changed in 1981 with the setting up of Maruti Udyog
Limited (MUL), a joint venture between the Indian government and the Japanese
automobile major Suzuki Motor Corporation. MUL's small, fuel-efficient and welldesigned car, Maruti 800, soon became a huge success. Consumers, whose choice
had been restricted to the 'old-fashioned' Fiat and Ambassador cars, went in for
the small car. By the late 1980s, MUL became the market leader, leaving PAL &
HML way behind.
After the Indian economy was opened up to foreign players in the early 1990s,
many multinational auto manufacturers entered the country. The industry
scenario changed when the foreign companies set up joint ventures or
subsidiaries. The passenger car industry was segmented based on price as the
small car (upto Rs 0.3 million), mid-size (Rs 0.3 - 0.5 million), luxury car (Rs 0.5 - 1
million) and super luxury car segments (above Rs 1 million) (Refer Table I & II for
industry statistics).
TABLE I
THE INDIAN PASSENGER CAR INDUSTRY

Segment Models*

Approximate market
share of the
segment (19992000)

Economy
(up to Rs Maruti Omni, Maruti 800,
0.25
Padmini.
million)

46.8%

Mid-size Premier 118NE, Ambassador

(Rs 0.25 Nova, Fiat Uno, Zen, Hyundai 43.1%
- 0.45
Santro, Daewoo Matiz, Tata

million) Indica, Contessa.

Peugeot 309, Tata Estate,
Tata Sierra, Maruti Esteem,
Luxury
Cielo Executive, Honda City,
(Rs 0.45
Mitsubishi Lancer, Ford Ikon,
-1
Opel Astra, Fiat Siena, Opel
million)
Corsa, Daewoo Nexia,
Hyundai Accent.
Super
luxury
Mercedes Benz and other
(Above
imported models.
Rs 1
million)

10.1%

Source: www.karvy.com
* The list is not exhaustive.

TABLE II
THE INDIAN PASSENGER CAR INDUSTRY - PLAYERS AND MARKET SHARES
April 1999 - January 2000
Volume Market Share (%)
MUL

323,058 63.4

Hyundai Motors India Ltd.

59,773

11.7

Telco

43,053

8.45

Daewoo Motors

29,549

5.8

HM

21,093

4.14

Ind Auto

17,649

3.47

Ford India

4,523

0.89

Honda

7,383

1.45

Opel Astra

2,036

0.40

Mercedes-Benz

748

0.15

Fiat India

60

0.01

PAL - Peugeot

Total

508,934 Growth (YOY): 56.3%

Source: Society of Indian Automobile Manufacturers (SIAM).

For the financial year ended March 2001, 590,647 units (Refer Table III) of cars
were sold by the Indian passenger car industry. However, the industry's growth
had an adverse impact on the environment, in terms of increasing pollution levels
across the country (Refer Table IV for a note on the pollution caused by
automobiles).
With steadily depleting oil reserves and increasing pollution, the emission
regulations became stringent and automobile makers were looking at alternatives
to the conventional engines. In the early 1990s, electric vehicles (EVs) started
gaining popularity. They had been neglected after the onset of Internal
Combustion Engines (ICE)3 in the early 1800s. Many EVs were launched in the
market by major players across the globe. GM was the first major manufacturer
to produce an electric passenger car EV1.

TABLE III
PASSENGER CAR SALES IN INDIA BY VOLUME (1994-2000)
Volume

Growth (% YOY)

1994

209,203

27.0

1995

264,822

27.0

1996

345,486

30.0

1997

410,992

19.0

1998

417,736

2.0

1999

409,624

- 2.0

2000

638,815

55.8

2001

590,647

- 7.54

Source: www.karvy.com

TABLE IV
A NOTE ON AUTOMOBILE POLLUTION
Automobiles are one of the major causes of environmental pollution. The
increase in the number of vehicles on the road also increased pollution. Besides
damaging the environment, automobile pollution has also been identified as
one of the primary causes for many health problems like eye irritation, and lung
and respiratory disorders. The major sources of pollution from automobiles are
its emissions including hydrocarbons, nitrogen oxides, carbon monoxides and
carbon dioxides. All these pollutants affect the environment in different ways.
The nitrogen oxides damage the ozone layer, which protects the earth from the

harmful ultraviolet rays. The oxides make 'ozone holes' thereby allowing more
ultraviolet rays to pass through. The oxides of carbon are major contributors to
global warming. Carbon monoxide reduces the flow of oxygen in the blood thus
causing health problems.
Automakers around the world have been working on new models reduce
pollution. The 'Big Three' - GM, Ford and Chrysler - were one of the earliest
automakers to launch low-emission and zero-pollution vehicles. David E. Cole,
director of the U-M Office for the Study of Automotive Transportation (OSAT)
said, "Automobile manufacturers and their suppliers will continue to face many
formidable challenges in the next decade as they address the growing
environmental challenges, and the tough global competition and more
demanding customers."
Governments have also been working towards containing pollution caused by
automobiles by implementing 'emission norms.' These norms indicate the
permissible emission levels from petrol and diesel vehicles. Introduced for the
first time in Europe, the norms were called as Euro I and Euro II. These norms
required manufacturers to reduce emission levels by making some technical
changes in their products. India adopted the Euro norms as Bharat I and Bharat
II respectively.
Source: ICMR

The first low-emission vehicles were the Hybrid Electric Vehicles (HEV), which
combined the ICE of a conventional automobile and the battery and motor of an
electric vehicle. The combination offered many advantages including fuel
efficiency and environmental benefits. These vehicles were developed to
overcome the disadvantages of an electric vehicle. The electric vehicles could be
used only for short trips, as its battery had to be recharged after a few kilometers.

Some of the first HEVs include Toyota's Prius, Honda's Insight and Civic. In 1991,
the GoI framed the first legislation on air pollution. By mid-1990s, the emission
level for automobiles was tightened. The industry started using the latest
technology and produced increasingly cleaner cars.
It produced Low Emission Vehicles (LEV) in 1996 and Ultra LEV (ULEV) by 2000. By
2000, the new vehicles in the industry had emission levels, which were about 80%
less compared to the 1989 levels. The emission level came down from 360 tons
per day to 70 tons per day. A four-wheeler complying with the Euro II norms
emitted 2-3 times less carbon monoxide and 3-4 times less hydrocarbons and
nitrogen oxides.
Background Note
The Maini Group (Refer Table V) was established in 1973 in Bangalore (Karnataka)
by Sudarshan. K. Maini (Sudarshan)4, who aimed to blend western technology
with Indian craftsmanship.
The group followed the 'single zero principle' and its philosophy was 'Karma
Parma Dharma' (Work is Worship). The group's products ranged from precision
components to in-plant material handling equipment and, from granites to
abrasives. The group was also involved in international trading and offered ERP
solutions. Maini Group had technological agreements with Abressa (Spain), ClarkBlue Giant (US), Hensel (Germany), HIAB (Sweden) and STILL (UK).
Some of the major clients of the group included General Motors, Bosch, BT, MIC,
OMR and other Indian companies in the automobiles, consumer goods,
engineering, and food processing and pharmaceuticals industries. The group was
known for its quality standards and its plants had ISO 9001 and QS 9000
certification. Chetan Maini (Chetan), son of Sudarshan, the chairman of the Maini
Group, was always fascinated with cars and designed his first car during his school
days.
He made a remote-controlled, battery-operated toy and bagged the first prize at
the school's science exhibition. He graduated from the University of Michigan,
Ann Arbor, with a specialization in solar-powered vehicles. After graduating, he

worked at General Motors' EV factory as an intern for six months. Chetan then
joined the US-based Amerigon Electric Vehicle Technologies Inc. (Amerigon)6,
which was involved in building EVs.
At Amerigon, he built about six types of Solar and HEVs. He was also the leader of
the team that won the 'GM Sun Race of Solar Vehicles' in 1990 and the team also
bagged the 3rd position in the World Solar Challenges in Australia. In the early
1990s, Chetan planned to build his own EV and established RECC with the help of
Sudarshan. Chetan said, "Cars are my passion, and the Reva is my dream that will
soon become a reality."
Sudarshan had dreamt of launching a small car in Bangalore and making the city
pollution free. However, he planned to build an electric car after his son Chetan,
joined Amerigon as a project manager for an EV project. Explaining the primary
objective of RECC, he said, "It is the passion for the environment and turning
Bangalore into a pollution free city." Further, the Maini Group manufactured
electrically operated material handling equipment.
Sudarshan explained, "...the group's material movements division, which
manufactured electrically-operated material handling equipment, offered us the
obvious choice to venture into the electric car industry rather than the
conventional car market. It is a car that is made for India to suit Indian conditions
using material available in India."

TABLE V
THE MAINI GROUP COMPANIES
Company
Maini
Precision
Products

Year of
Operations
Establishment

1973

Manufactured and supplied of

more than 500 types of machined
components to the OEMs like

Bosch and General Motors.

Karnataka
Electronics

1976

Produced fuel filters, filter

inserts, hand primers, roller
tappet pins and diaphragms.

Bangalore
Commercial
Corporation

1980

The trading arm of the Maini

group

1986

Offered total in-plant material

handling solutions to a wide
range of industries.

1992

A 100% Export Oriented Unit.

Produced high precision, high
quality granite tiles.

1992

A joint venture between the

Maini Group and Abressa (Spain),
the company produced a wide
range of abrasives for grinding or
polishing of marble, granite,
ceramics, terrazzo and artificial
stones.

1999

Offered a range of business

solutions in information
technology, including integration
of packed applications for
product development and
process management.

Maini
Materials
Movement
Maini
Granites
Limited

Maini
Abrasives

Maini Info
Solutions

Source: www.mainigroup.com

On The Road to Reality

Reva Electric Car Company (RECC) was established in 1994 through a joint venture
between the Maini Group and Amerigon. Amerigon had a 32% stake in RECC's Rs
58 million equity and Maini Precision Products and Maini Materials Movement
held the remaining 68%. Amerigon helped RECC in building the chassis of Reva.
The car was manufactured at RECC's plants at Bommasandra in Bangalore. The
car's key technologies included its steel frame, the energy management system
and a motor controller. The motor controller was developed through a technical
collaboration with Curtis, one of the world's leading manufacturers of motor
controller for electric vehicles.
In 1996, RECC built the first prototype for Reva and received the mandatory
certification. The prototype was also put through the 250,000 km 'shaker test'7 at
the Automobile Research Association of India (ARAI), Pune. It was also tested at
ARAI for homologation8 and was certified for road-worthiness. The prototypes
were also tested in the US.
They were also tested on the Indian roads in conditions of heat, humidity, and
monsoons. However, Reva was not launched immediately. Chetan explained, "We
had no definite plans to launch then. It's just that we've been making absolutely
sure that when the product is in the market, it doesn't have any problems."
In addition, RECC wanted to ensure that at least 75% of the car's components
were available in India. The car had 1,100 components out of which 99% were
manufactured in India. In terms of value, the components manufactured in India
accounted for about 75%. The company aimed to achieve an indigenisation of
100% by the end of 2002.
Further research was done to make the car more comfortable and efficient. AT
Kearney Consultants9 had conducted a market survey, based on which it
recommended some changes to the car. The recommendations included

extension of the wheelbase to create more internal space and improvements in

riding comfort.
In 2001, the commercial version of Reva was launched in Bangalore. Reva was a
two-door hatchback10, which could accommodate 2 adults and 2 small children.
RECC did not adopt any marketing or promotional strategies as the company felt
that the cars should be sold without the help of advertisements. Sudarshan said,
"We mostly depend on public relations and use minimal advertising." The car was
targeted at two-wheeler owners planning to buy a 4-wheeler.
It was also positioned as an ideal second car for housewives, professionals and
students. RECC also planned to sell the cars to tourist operators to be used as
taxis. Sudarshan said, "At Rs 0.40 per km, it is the cheapest car to drive around."
RECC also promoted itself as an environment-friendly company. It promoted
many environment-linked events on World Environment Day. The car also had the
slogan: "I don't pollute when I commute."
Initially, RECC had only one company-owned showroom in Bangalore and planned
to open more showrooms in some of the major cities across India. The company
planned to launch the car in a phased manner, nationally. Depending on the
demand, the company appointed dealers nationwide. In late 2001, RECC launched
Reva in Goa. By January 2002, RECC appointed about 7-10 dealers in North India.
In April 2002, Reva was launched in Delhi and Surat.
To promote the sales of Reva, RECC requested the state governments to exempt
Reva owners from road tax and sales tax. This was granted by the Karnataka and
Rajasthan governments. In September 2001, RECC entered into an agreement
with ICICI11 to provide loans to people planning to buy Reva. As per the
agreement, customers could get loans covering about 75-85% of the cost of the
car. In February 2002, Reva was planning to extend its agreement with ICICI for
leasing the cars at a nominal cost.
According to the agreement, Reva would take care of all repairs, and any
customer could own the car on a pre-determined monthly amount. After three
years, the customer could either retain the car or return it to the company. The

insurance premium on Reva was also low and RECC offered to replace the car in
case of repairs or accidents. Sudarshan said, "We will ask no questions. They will
get to drive a new car till the earlier one is repaired and the insurance claims are
settled." The company also offered to make customized cars to suit individual
requirements.
In February 2002, RECC introduced a new scheme under which it agreed to buy
Reva back if a customer was not satisfied with its performance. The customer
could get back the money invested excluding about Rs 43,000, which accounted
for taxes and insurance. Sudarshan said, "It is a new concept and the scheme is
for a limited period. We want to promote electric cars as much as possible. What
is heartening is that not a single customer has brought back his car to us." By April
2002, RECC had sold about 180 cars in Bangalore and Goa.
The Future of Reva
In late 2001, RECC reported that Reva was well accepted in the four cities it was
launched and that the company was working on new versions for the domestic as
well as international markets. Ashok Dharwadkar, chief financial officer in a
technology company, who was the third Indian owner of Reva, said, "The
performance of the car is good and the company offers good service. There are
still a few nagging problems like high noise level and fall in efficiency while driving
uphill."
In January 2002, RECC launched Reva Deluxe at the Auto Expo 2002 in New Delhi.
The Deluxe model had a new look with upgraded interiors, defroster with heater,
a stereo system, and climate control seats (CCS)12. Chetan said, "The
development of the new model is a result of the feedback of our very satisfied
customers in Bangalore, where over 150 cars are now running.
The introduction of climate control seats is in line with Reva philosophy of using
cutting edge technology, patented by Amerigon, leaders in advance automotive
technology." RECC has planned to launch the car in other cities like Jaipur and
Hyderabad by the end of 2002. RECC is currently working on a new version to be

launched in the UK market. The company has also entered into alliances to export
the cars to Nepal.
It was also negotiating the export of the car to the UK, Japan, Mauritius, Israel,
Norway and Sri Lanka. Exports to these countries were expected to start by the
end of 2002. Sudarshan said, "We will be sending some cars to Nepal soon and
have signed MoUs with Italy, Norway, Japan and an agreement with Israel and
what we will be able to offer will be much cheaper than the EVs available outside
the country. For instance, our product will cost around $9,000, while an EV in
other countries come at around $20,000 or more."
However, some analysts are skeptical about Reva's success in the long run. They
feel that it would be difficult for RECC to promote the car, as the petrol-driven
Maruti 800, the largest selling car in India, was available for about the same price
as Reva. In addition, Maruti had a higher seating capacity (Refer Table VI).
Moreover, Reva could go only up to 80 km and had to be charged before that
limit. As there were no mobile recharging facilities in India, the car had to be
charged at home or at the working place.

TABLE VI
COMPARISON OF TECHNICAL FEATURES BETWEEN REVA AND MARUTI 800
Maruti 800

Reva

Length

3,335 millimeter
(mm)

2,638 mm

Width

1,440 mm

1,324 mm

Height

1,405 mm

1,510 mm

Wheel base

2,175 mm

1,710 mm

Minimum turning
radius

4,400 mm

3,505 mm

Engine/motor

4 stroke petrol

Separately excited DC
motor

Maximum speed

140 km/hr

65 km/hr

Braking system

Disk and drum

Disk and drum

Maximum torque

56 Newton Meter
(2,500 rpm)

56 Newton Meter
(2,500 rpm)

Steering

Rack and pinion

Rack and pinion

Operating cost

Rs 2.15 per km

Rs 0.40 per km

Seating capacity

4 adults

2 adults, 2 children

On-road price

Rs 0.237 million

Less than Rs 0.2

million

Source: Business Today, April 22, 2000.

Other major Indian automakers were also entering the segment in India. In 2001,
Mahindra & Mahindra was testing its three-wheeler 'Bijilee' and was planning to
enter the 4-wheeler segment. However, Sudarshan seemed to be confident of
success saying, "We are in a totally different market segment with the Reva being
marketed as a personal 'city' car."
Prof. C.C.Chan, president of the World Electric Vehicle Association, said, "The
future of EVs is bright... for a sustainable ecology, we need to have environmentfriendly vehicles. But it depends on whether you can mass-produce, ensure
reliability and good performance at reasonable costs. These will define its future."
It remained to be seen if Reva could spark an electric revolution in the Indian
passenger car industry.