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The EV revolution is here, can EMO Energy be the next BP/ HPCL/ IOCL? | Sheetanshu Tyagi(Co-founder)
0 Playsin 15 hours
"Energy is the only input cost that can be systematically optimized over time."
A game-changing perspective from battery tech pioneer Sheetanshu Tyagi that's reshaping how India's quick-commerce giants think about profitability. This insight is driving EMO Energy's transformation from a hardware company to an Energy-as-a-Service platform.
Sheetanshu Tyagi is the Co-Founder & CEO of EMO Energy, a deep-tech startup revolutionizing India's EV battery landscape. With over a decade of experience at world-class companies including Rivian (as one of the first 50 employees), Ather Energy, and Ola Electric, Sheetanshu has been at the forefront of the global EV revolution. He holds 8 patents for innovative automotive systems and has successfully raised $7.86 million for EMO Energy, achieving a valuation of ₹203 crores. Under his leadership, EMO has deployed over 2,000 battery packs, covered 18.3 million kilometers, and established partnerships with industry giants like Blinkit, BigBasket, and Domino's.
Host Akshay Datt explores Sheetanshu's journey from a 2BHK startup to building India's most advanced battery technology platform.
Key Insights from the Conversation:
👉Hardware-First Philosophy: EMO's contrarian approach focuses on superior mechanical and thermal engineering rather than expensive specialized cells
👉Fast Charging Breakthrough: 20-minute charging capability with 5+ year battery life, solving the critical downtime problem for commercial fleets
👉Immersion Cooling Innovation: Proprietary liquid cooling technology maintains uniform temperature within 1°C across all cells
👉Energy-as-a-Service Model: Transitioning from 90% hardware revenue to 50%+ software and services, offering systematic energy cost optimization
👉Strategic Market Focus: Targeting high-utilization commercial fleets rather than consumer market, doubling rider productivity to 140-160 km/day
👉Sodium-Ion Future: Predicting India's potential to bypass lithium dependency and build sovereign battery technology using locally available materials
#EVBattery #StartupIndia #DeepTech #ElectricVehicles #BatteryTechnology #EnergyStorage #Entrepreneurship #TechStartup #Innovation #FastCharging #EMOEnergy #IndianStartups #CleanTech #SustainableMobility #VentureCapital #HardwareTech #EVInfrastructure #BengaluruStartups #FutureOfMobility #StartupJourney #TechFounder #electricmobility
Disclaimer: The views expressed are those of the speaker, not necessarily the channel
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Transcript
Introduction to Battery Technology
00:00:00
Speaker
You take these cells, individual kind of energy so sources. One of them can, let's say, go into a flashlight. Four of them can go into a laptop. And now 9000 of these go into a Tesla. What is the problem with fast charging? Is it just degrading battery life or are there other challenges with fast charging?
00:00:15
Speaker
So i actually I have a huge safety concern within my battery if I keep fast charging and I basically damage my cell, which then leads to thermal propagation, fires, etc. Why is there still lead acid in the world?
00:00:27
Speaker
In the past, obviously, we've heard of lead being used. We've heard of 100 other materials being used. In the future, we might have water batteries.
00:00:37
Speaker
The reason why I wanted to get you on the show is to...
Basics of Battery Chemistry
00:00:48
Speaker
the reason why i wanted to get you on the show is to understand battery from the nuts and bolts upwards. Just take me through what exactly is a battery and how have you seen that technology evolve?
00:01:02
Speaker
Sure, Akshay. So the idea is that batteries essentially are kind of in a way magically energy storage devices. So you have electrons basically inside them. So boiling down to the most basic electrochemistry here, right, which is really what batteries are.
00:01:18
Speaker
You have small cells which have certain materials in them. Those materials over time react with each other and basically produce a certain amount of power. So what's unique to the newer cells that exist is that they use lithium as their main chemical.
00:01:32
Speaker
In the past, obviously, we've heard of lead being used. We've heard of hundred other materials being used. In the future, we might have water batteries. But the idea is that today, from a global perspective, lithium is the best placed material to produce a battery.
00:01:45
Speaker
Now, what happens inside a battery? So you'll most likely see like round cells. You put them in your remote. Now you put them in vehicles. The remote cells are obviously smaller. They used to be a nickel metal hydride kind of material, which obviously is a little different.
00:01:58
Speaker
And now you have bigger cells, which are lithium based, which are going to cars, bikes, and even energy storage now. They're pretty much the same thing. So if you open this up, what you'll see is an entire roll basically being wrapped around each other.
00:02:10
Speaker
So what there are is if you completely dissect this, there's three layers here. One's what people call the cathode, then the separator, and then the anode. Now all three of these basically are very critical.
00:02:21
Speaker
The cathode and the anode are basically positive and negative and basically interacting with each other. Lithium is basically transmitting from one electrode to another and then basically going back and forth. So when you discharge it moves from one side to the other and when you charge it moves from one side to the other.
00:02:38
Speaker
What binds all of this together is a material called the electrolyte. So that basically is but kind of becoming the medium for this transfer. So from cathode to anode, you separate this with a separator. And then you have this electrolyte, which allows that transfer to easily happen from cathode to anode and back and forth.
00:02:54
Speaker
This in the most basic words is a basically a battery and a lot of people in school have seen the potato test or like a water but where you do like a plus and minus and you see like a circuit form.
00:03:05
Speaker
So now if I connect like a motor, or if I connect a switch or if I connect a light of some sort to this battery, I can actually see electricity flow. and the actual but like one might ask them why is this happening like why is lithium basically just reacting this way so there are concepts of electrochemical potential and basically like how voltage is allowing this to happen but at the end of the day it's magic it genuinely is pure magic as to why this is happening and why lithium why electrodes basically exist why electrons move all of this we won't get into but if i take a history of batteries and today see where we are
00:03:40
Speaker
The last 15 to 20 years have been absolutely kind of incredible to see like what kind of battery progress we've made right as like it' a civilization, to be honest. because 20 years back, nobody would have imagined the kind of power, the kind of energy, the kind of applications we're doing batteries. So now what's happened is you take these cells, which are basically individual kind of energy so sources.
00:04:03
Speaker
One of them can, let's say, go into a flashlight. Two of them, if I basically combine and then basically add together, can maybe go into like a small little gaming controller. Four of them can go into a laptop. So I'm basically combining cells together to get more power, more energy.
Battery Design and Configuration
00:04:18
Speaker
And now 9000 of these go into a Tesla. So that's the scale of these. Like you can basically grow from four which are going to a laptop and literally the exact same cell 20 years back, Tesla basically took and started placing into cars.
00:04:31
Speaker
So they started with basically using laptop batteries. They connected thousands of these in what we call series, which is basically increasing voltage to a high enough point to where you can then operate them.
00:04:44
Speaker
And then you also connect them in parallel, which basically then allows you to produce a certain amount of current. So voltage and current then when combined produces power and then over time that produces energy.
00:04:55
Speaker
This is really in fundamental like concept what a battery is. So like if I had to basically give you like more technical words to these, so the cell is the most kind of basic constituent. So one of these that you see a cylindder cylinder is a cell.
00:05:08
Speaker
Thousand of these then become basically a battery system. Why are the mobile phone batteries flat? They are not cylindrical. Right. That is a very good point. So if you see certain applications, they'll basically have flat batteries instead of being rolled up.
00:05:23
Speaker
Now, what's actually happening is, so you still have the same thing. So instead of rolling, you essentially just keep creating sandwiches and basically kind kind of combine them one behind us. You have cathode, anode, separator. You're going to keep stacking these one over the other.
00:05:36
Speaker
They're obviously mainly for packaging reasons because a cylinder obviously would be too large for a phone and from a very safety perspective taking that and just making it very very large is basically then what you call a prismatic cell. So that's basically a pretty large concept in automotive too where you pouch cells and prismatic cells.
00:05:54
Speaker
So they're very large phone cells basically. They have their own advantages. They're actually much lighter. they have custom packaging. But if you've seen an old phone and if you've seen the cell, it's just giant. It's basically like just, yeah, it's very pressurized towards the end of life. So it basically becomes like a giant ah puffed up balloon, like very highly pressurized.
00:06:15
Speaker
so that's that's the bu of yeah Exactly. It's a very giant safety risk, I'd say. And that's why you usually use phones for two, three years and then pretty much discard that because that battery is pretty much gone to waste. And cell phones use the kind of soft pouch cell that they're basically using.
00:06:31
Speaker
Most cars are going away from, but some vehicles still continue to use them. But yeah, that's a good point. That's a different form factor. So the pouch are prismatic, essentially, instead cylindrical. Why do you do separator between the anode and cathode? You're saying that lithium molecules move between the anode layer and the cathode layer.
00:06:49
Speaker
And that is how either ah the current is being absorbed and stored, the energy is being absorbed and stored, or the energy is being released, and depending on which side the lithium...
00:07:01
Speaker
ah molecule is moving towards. ah but Why is there a need for a separator in between? So if I take the plus and the minus here, essentially, if I basically allow them to directly contact each other, that basically creates a short circuit.
00:07:15
Speaker
Essentially, if you basically take a rod and essentially just shove it into your so like socket, you are essentially becoming conductor. You are now seeing that short circuit happen. So essentially the same thing is happening in cells.
00:07:25
Speaker
I want to basically create a separator and that can be multiple materials. Basically, it's completely providing electrical basically isolation between my anode and cathode.
00:07:37
Speaker
So, isn't lithium supposed to be a metal? Because I remember rare earth metals as the terminology used for all of these lithium, nickel. ah So, how is that metal... ah operating in that liquid and moving from one to the other from cathode to the node.
Global Battery Production Overview
00:07:55
Speaker
Good question. So today what actually when if I take the entire production of cells and how cells are actually made, what's actually happening is that right in the first or second step, I have multiple powders that are being basically created. So I have a lithium powder, I might have nickel powders, I might have cobalt and these are all being mixed to create what they call a slurry.
00:08:15
Speaker
Essentially, this is basically then applied as a uniform paste over a certain material. So that might be an aluminum conductor or a nickel or a silicon anode or whatever that might be. It's basically applied over it.
00:08:28
Speaker
This then basically transmits all the way back and forth from the electrolyte. So you're right. Metallic, in basically when you're extracting ores, you're essentially getting this large metal. They're basically extracting it in powder form, then creating slurry, then depositing it in on an anode and cathode and then forming a cell essentially.
00:08:45
Speaker
Okay, okay, interesting. And ah the ah rare earth metals are largely in China, I guess. So China would be providing cells to most of the world or like who who manufactures cells?
00:08:57
Speaker
So rare earth, I guess, metals are basically spread out all over the world, right? So you have some in South America, you have a big chunk in Australia, like parts of ah parts of Asia for that matter.
00:09:08
Speaker
The one big thing China has done very well, and even though they have some of them themselves in terms of like ores, they've essentially become the mining partner for a lot of these countries. So if you see a lot of these companies, Venezuela, Chile, some parts of Africa, they aren't the most developed countries in the world. What China has done is basically provide economic assistance to these countries to develop significantly over the last 10, 15 years and become their mining and processing partner.
00:09:35
Speaker
So it's interesting to see that China at least 20 years back had this game plan knowing that this would become like a very large part of the world's let's say geopolitical kind of behavior too.
00:09:46
Speaker
So they were essentially, I'd say at least 90% of all processing, refining, mining, basically for these metals happens through China, if not directly in China. So even today as a cell company, if you were basically trying to, let's say, set up a cell company in India, a lot of those materials once processed or refined would in a way come through China. I think a lot of companies are setting up raw material processing also, but today they are yeah leaps and bounds ahead in that particular category at least. And which is why they've been vertically integrated to now set up production also and then do cell assembly, then battery pack assembly, vehicles, all the way from literally mining lithium to basically shipping the vehicle to its ah destination essentially.
00:10:28
Speaker
Okay, ah take me through the journey from ah mining to battery in Tesla. Yeah, absolutely. What are the steps in that? yeah So today, essentially start basically, the first step is to basically find those materials. So you have reserves across the world, you basically mine these key materials.
00:10:44
Speaker
All of those would essentially go to some kind of processing and refining center because the absolute ah kind of refinement you require is basically 99.99
00:10:53
Speaker
All of these are then basically processed into a cell factory where then they're forming the slurry. ah The anode and cathode might potentially be made in the same facility, but you might just get rolls from, let's say, multiple companies like aluminum foils, like copper foils.
00:11:07
Speaker
You'll get like a stainless steel can basically pressed from somewhere else. And now all of these components will start basically coming in together to basically produce a cell. so ah The actual process of where the winding happens, where the tabs are attached, where the cylinder goes through, all of these happen in one cell factory.
00:11:25
Speaker
The output of these is essentially that full proper container of cells and like each box might have like 130, 150 of these. Those boxes now get shipped to a battery pack company, which might also be the vehicle company in case of Tesla or might be different for some other people.
00:11:42
Speaker
At the battery pack company now, and it's basically that company's job to essentially place all these cells together, electrically connect them, do a lot of safety checks, attach all the electronics, a lot of sealing, a lot of mechanical bonding and basically creating one final system that can then basically go into an automobile or into an energy storage system.
00:12:01
Speaker
So in this case, if it's Tesla, Tesla has a battery pack line. They basically produce a battery pack and now it's basically shipping out of the battery pack line to go into the vehicle assembly line where it then gets attached to the chassis. or the electrical connections, the motor controllers get made and essentially shipping out a vehicle.
00:12:18
Speaker
So I'd say there's at least six people involved from mining, processing, refining, cell assembly, pack assembly, and then the final application assembly. So these Household names in India, like say, Exide, Amara Raja, what are these? Are these cell manufacturing, battery manufacturing? What do they do?
00:12:36
Speaker
So interestingly, if you see lead acid, lead acid actually, cell and pack are exactly the same thing. So when you see like a lead kind of plastic container, which is basically one- Lead acid is like ah first generation technology or something like that. And this lithium ion is second generation.
00:12:54
Speaker
Yes, I'd say lead acid has been around forever. It's a much like safer and a much lower energy and power way to do things. Lithium is a much more what I'd call like dangerous metal also for that matter. But with that danger also comes excess power.
00:13:07
Speaker
We've also as a like just like society kind of been getting more used to how to use lithium over the last 20-30 years. But yeah, that is really the big issue. Like lead is obviously dangerous in its own different ways.
00:13:19
Speaker
ah But from a usability perspective, there's no flammability issues, which doesn't doesn't affect the user. So, yeah, it's I'd say first gen in a way. ah Nickel metal had right in some others was second. And now lithium ah is basically pretty much everywhere. yeah Okay.
00:13:34
Speaker
So, yeah, we were talking about what an Exide or Amara Raja. So, essentially, you'd basically start... The interesting thing about lead all the way from producing the raw material of taking lead and then making into a pack, pretty much all of it happens in one line.
00:13:50
Speaker
So you essentially just buy lead ingots, which basically is literally the raw material. You're buying it from somewhere. Lead is obviously a lot more easily available also. You essentially like start melting it, start basically kind of distilling it in certain ways and produce one pack. So today, Amara Raj is basically sourcing material, producing the cell and the pack all for lead acid.
00:14:09
Speaker
Now transitioning to lithium, what's happening is Amaraja and Exide both in certain ways have battery pack assembly today in a very minor scale. So they today buy cells just like anybody else from different parts of the world, bring those cells to India, assemble them into a pack and then sell them for certain applications.
00:14:27
Speaker
But what they're also in parallel starting to do is basically set up cell assembly. So basically taking may potentially the raw materials from different places, most likely refined and processed, and then assembling them into a cell, which then you can put them into a pack. So they're taking stage four and five from this and then basically continuing on.
00:14:47
Speaker
ah The first three stages, which is mining, processing, refining, are still happening somewhere else.
Comparing Battery Technologies
00:14:52
Speaker
Okay. Okay. Why is there still lead asset in the world? but why Why doesn't everyone use this third gen lithium-ion battery?
00:15:03
Speaker
Yeah, I'd say there's the biggest factor over everything is cost. The idea today is that lead acid still is sub $30 a kilowatt hour in a lot of systems. Lithium is just about starting to hit that price in China. Like you're at $35-$40 a kilowatt hour in cell level.
00:15:19
Speaker
On system level, there's $70 a kilowatt hour. But also one of the major reasons is the entire safety and usability of lead is just so much easier than lithium that it just allows that the applications that are already, let's say, lead focused, let's say a residential, home storage, backup, a lot of, let's say, telecom for that matter, it just works. But you can already see that the transition between two-wheelers and vehicles has been so fast to lithium because the power, the energy power ah that power and energy per kilogram and per rupee, let's say, is so much higher than lead that it makes perfect sense. I'd say most applications that lead is dominant in today will start to go lithium in the next five years.
00:16:03
Speaker
There is a definite push, even from the safety side, that obviously some people haven't solved for. But I see that getting better and better over time. And even lithium itself is improving to, let's say, its own next generation, which we can come to later, where the electrolytes improve, some of the anodes improve, to basically give this like next generation of safety, essentially.
00:16:24
Speaker
and Okay. ah What do you mean by energy cost? ah like Like energy per rupee, energy per kg? Yeah, absolutely. So the big... ah The most important metric for lithium that most people track is dollars per kilowatt hour.
00:16:38
Speaker
So it's essentially how much am I paying for one unit of electricity or one unit of electricity basically move essentially. Right. So when I have storage capacity of one kilowatt hour, one kilowatt hour. Yeah, absolutely.
00:16:51
Speaker
So for every kilowatt hour, essentially, there's a certain price I pay. That price has been constantly changing over the last five years. ah Five years back, it used to be close to $200, $250 a kilowatt hour on sell level.
00:17:04
Speaker
That's down to $30, $40 a kilowatt hour now, which is kind of insane. But yeah, I think China has had a huge role to play in terms of ah production output and in terms overproduction in a way, essentially.
00:17:18
Speaker
you You said it's $35 at cell level. What is the next level? You said at system level, it's $70. Yes, we will combine all these cells to make a battery pack. Let's say I might put that battery pack into a car or I might put that battery pack into ah energy storage.
00:17:32
Speaker
A lot of these from China at the lowest level are around $60-$70 a kilowatt hour. India is hitting those costs for certain segments, like the low-cost segments, but not all the segments essentially. Because some require better power, some require better safety, they might require just overall better systems, better cooling systems, better electronics.
00:17:49
Speaker
That bumps up the price to one hundred hundred twenty dollars a kilowatt hour. Why is there such a massive bump in price from cell to battery? So you also use better cells. So like some of these cells are at 60, 70 dollars a kilowatt hour. If I take like the really premium cells like from BYD, CATL, which are also using lithium, but they're essentially using different combinations and different chemistries combined with that lithium. So even within lithium, there's actually hundreds of variants of chemistries within that.
00:18:17
Speaker
So the two dominant ones are NMC and LFP. which is basically niingel nickel, manganese, cobalt, and then basically ferrous phosphate, lithium ferrous phosphate. These two are basically just branches of lithium chemistries. Now, even within these, there's a cost difference.
00:18:34
Speaker
And even within them, there's a cost difference. So like they might have like five different variants of LFP, five different variants of NMC, and all of them will essentially have an impact on what the final cost will be. So I might start with like a very good premium sell at $100, $120 kilowatt and then build a system maybe at a $200 a kilowatt hour.
00:18:52
Speaker
But the advantage is that I will get better life. So I'll be able to give better warranty to my customers. I'll potentially be able to charge that pack much faster. I'll give more power to a car so I'll get more horsepower.
00:19:04
Speaker
And essentially i also just provide a much safer solution for a customer while doing all these things. So that's where the cost kind of kicks in even within the same lithium chemistries essentially. ah So what I want to know is this, suppose you're using cells which are costing $30.
00:19:20
Speaker
What is that additional $30 being spent on so that the battery is costing double? ah like I thought batteries just like a container where a bunch of cells are wired together.
00:19:32
Speaker
That doesn't seem like a very high overhead for it to double the cost. Absolutely. So if I take the most basic battery packs are pretty much what you described them, right? And maybe in that case, the cost increment isn't that high. Like you might be like the cells might be 70% of the total battery pack. So you just have like a sheet metal container. You put all these cells, join them with some materials, put like a very basic electronics and kind of wrap it up.
00:19:54
Speaker
So in that case, obviously, it's pretty straightforward. You might see like a 30% impact on your cost. But most batteries are at least like... a much more sophisticated kind of system and maybe I'm referring me to like let's say passenger cars and trucks and buses where you have a cooling system with a battery, you have like very good electronics, you might have a sophisticated IoT system which is transmitting, you might not use like a sheet metal system, you might use aluminium castings.
00:20:19
Speaker
So all of those essentially give rise to slightly higher costs but also a much better final application of those cells. so it also is a lot more valuable for you to basically make sure that those cells connect in the best possible way. and when I say best, it means electrically, mechanically, thermally, all of those kinds of combinations should be what I say optimal. And that might vary from application to application.
00:20:46
Speaker
But if I take five different companies, they'll use the exact same cell in potentially five different ways. And it's not completely obvious that the impact of all five, let's say different designs or different engineering systems will be the exact same.
00:21:00
Speaker
They might be close, but not same. So I think that's the big difference. and Sell to pack, which is what I'm referring to, is basically getting cheaper and cheaper. So cells are becoming a larger and larger ah ratio of that entire cost.
00:21:15
Speaker
So you see China basically with LFP essentially is literally just stacking cells together and just bonding them together and putting them in a box. So that didn't in the future is going to become seventy eighty percent of the cost.
00:21:26
Speaker
But I'd say there are today not like complete clear ways to do that. So, you also have cooling systems and other materials which basically add some cost. Okay.
00:21:36
Speaker
So, ah what China is doing with LFPs doesn't need cooling system. That's why… ah the Some applications… where I'd say like… Not all applications need cooling systems. If your discharge rates are low, let's say like you're running slow speed electric vehicles, like you're running e-rickshaws,
00:21:51
Speaker
or running like a small car, like say like a Comet level size, maybe your power ah ratings aren't that high, maybe you aren't fast charging it. So yeah, you don't really need a cooling system, but you will see impact. Like if you're operating in 45-50 climates, you will see some derating on your power.
00:22:06
Speaker
You will see those things. But again, those are edge cases, which let's say lower cost products are okay dealing with. But if I take, let's say, um like again, let's take Tesla for an example. They're essentially using a really complicated serpentine cooling system. They have, let's say, very advanced BMS. They're using a polyurethane foam compound.
00:22:23
Speaker
They have like castings around it. So yeah, it's just upon application, essentially. Like even a Tata Nexon pack, for that matter, pretty well engineered. It has a serpentine cooling system. All of those are then adding cost to basically make sure your cells then give better performance over time.
00:22:38
Speaker
Okay. um What is the difference between a premium cell and a non-premium cell? Because you said you can get a cell with $30 per kilowatt hour going all the way up to $120 per kilowatt hour.
00:22:49
Speaker
What do you get when you pay more? So three things, you would essentially first get better power. So for the same size and for the same form factor, so if I take, let's say 21700, which is a common form factor, it's a 21 mm dia and then a 70 mm length.
00:23:05
Speaker
Within that form factor, I can see 10 different companies which will have very, very different power ratings. So if I take, let's say, Formula E, for example, There is a certain cell company out Taiwan which mainly supplies for that.
00:23:18
Speaker
They're extremely expensive cells. And what they're putting inside it, again, is certain secret from their own perspective. But it's a very... I'd say advanced che version of NMC chemistries where they're using, let's say, more nickel, more cobalt, more essentially like doped materials to essentially increase power and energy output. So power, energy and safety is ah power, energy and life cycle is what I focus on. Safety is another one which will come to fourth.
00:23:45
Speaker
But I can go all the way to a very, very advanced version of this chemistry, which is LTO, which is a lithium titanium oxide or titanium oxide version of the same lithium chemistries, which you can now basically be touching $600 a kilowatt hour.
00:23:59
Speaker
But what you're getting is, again, absolute magic. You're getting like 10, 15,000 cycles while fast charging within 10 minutes. You're essentially able to push the entire envelope to a point where Like yes, batteries make perfect sense, right? But what you're paying for is mainly in cost and then in weight.
00:24:17
Speaker
So all of these factors basically can keep adjusting to give you different combinations of cells. So you might have something which let's say ah what they call cycle life, give you five to 700 cycles, which is basically I charge discharge once. So that's one cycle.
00:24:30
Speaker
And for most applications, that's not even two years. Versus I'm using, so that's maybe 30, 40 dollars a kilowatt hour. Versus I'm using like lithium titanium oxide, which is 600 dollars kilowatt hour. I put them in buses at the airport, which now super safe. I'm like completely sure they can never, ever go into any kind of scenario.
00:24:48
Speaker
And I'm charging in 10 minutes and I'm charging this for 25 years continuously. So yeah, it really comes down to applications and how you're financing these costs. But ah yeah, lithium is just amazing. and like You have like a whole spectrum.
00:25:01
Speaker
And I think what most people, i think, don't see is the fact that today, if we really had to implement at scale, all of the tech is already kind of there now.
00:25:13
Speaker
I know there's a lot of talk of like moving to sodium or to moving to some alternate form of solid state electrolytes in the future. And all these are great. But today what we have is
Battery Management and Engineering
00:25:23
Speaker
doing pretty much everything. Like there is very few applications and I'd say like those also going into like mining and construction and these really edge case applications like ships, maybe planes, which today need better chemistries for.
00:25:35
Speaker
But 90% of automobiles and static energy storage systems can be solved for today with most of the variants of lithium that exist. Okay. Okay. um and Okay. So I understood difference between a premium cell and a non-premium cell.
00:25:50
Speaker
you So what you're saying is the, while the storage might be one kilowatt hour in both a premium and a non-premium cell, but the power and energy output can vary. Uh, Power and energy are the same thing or what is the difference between Energy is basically the kilowatt hour like you mentioned. So that cell has one kilowatt hour. So it has one kilowatt hour of energy.
00:26:08
Speaker
Now, how much time I basically extract that one kilowatt hour in is basically power. So if I finish it off in half an hour, that's basically double the power of when I finish it off in one hour, which is half than if I do it in two hours. So...
00:26:22
Speaker
For a certain kilowatt hour, how much time i basically use ah that to extract this in basically is power. So, ah yeah, just power over time is energy. and Got it. Got it. Okay. Okay. So, with a premium cell, you have the same storage capacity, but you have more power, which means you can drain it faster if you want to.
00:26:40
Speaker
Yeah, absolutely. that's so That's one very big advantage. And you might even have like certain cells where for the same size, one has more energy for the same power. So like I might fit, let's say, 2 kilowatt hour in that size.
00:26:51
Speaker
So that I might be paying more for. like Let's say I want to build, let's say, like a bus, basically. So... Tesla, for example, uses ah certain chemistry of cells which have very, very high energy density. So you're basically storing a lot more energy in the same weight versus like some other company would basically use an LFP chemistry, which has lower energy density and therefore storing a little more more energy. and What that eventually impacts for the customer is range.
00:27:17
Speaker
Like how many kilometers is equating to how many kilowatt hours, which is then equating to, yeah, just range. Okay, so miniaturization is the other difference between premium and non-premium.
00:27:28
Speaker
If you want miniaturization, then you need more premium cells. And the cycle life, like how many times it can be charged and discharged would be the third difference between a premium and a non-premium cell. All energy life, yeah. um Okay, okay.
00:27:41
Speaker
ah You said the key thing is that cells connect in the best possible way. um Is this rocket science or like... like I mean, it's come from there, to be honest. i'd say, yeah. okay I don't think it is anymore. I think it's become pretty standardized now. So if I take it from like a very basic perspective, somebody sitting in like a garage or at home can develop a battery pack, right? Like I take cells, I like just like join them electrically, like with some spot welding or just a solder for that matter.
00:28:11
Speaker
And basic basically make a battery which I can operate. So the concept of a battery pack per se is not very hard to make. I don't think there's anything but rocket science level in that. But what does become rocket science is if you start trying to develop batteries for that kind of application. Like if you're developing it for a rocket or you're developing it for aerospace or for high-end automotive, then it starts to get more and more complex. And it's like any engineering. Like at at the lowest possible level, like if I'm basically just using a screwdriver, there's nothing.
00:28:41
Speaker
but Why does it matter how cells are connected? They're all connected to each other or there there's like cell 1 connected to cell 2, to cell 3, to cell 4, to cell 5, which is again back to cell 1 or like what is… No, so essentially you'd have to basically… there's connection methods.
00:28:56
Speaker
So mechanically itself, I'll actually do certain techniques. So ah there's four or five major techniques which people use. So there's spot welding, where people say actually like literally like when I weld two metals together, i'm literally coming with another metal and welding it.
00:29:10
Speaker
Then I might laser weld them, I might ultrasonically weld them. So I can keep getting more and more complex in how I weld them. And this basically then impacts your strength of bonds, but more importantly, your actual speed of manufacturing, which is a very, very large problem for batteries. Because today what stops scale for anything from an EV and energy storage perspective is how fast can I make batteries, like battery packs.
00:29:34
Speaker
So joining techniques and how I do it, how I'm electrically kind of pulling power out of them, like how is my electrical connections happening, because if I had 2000 of them, I'm pretty sure if I put 10 people in a room, they can all come up different ways to connect them. And when I say different ways, it's basically even as patterns and combinations when I'm connecting voltage and series, I might have different flows of electricity. So I might start from here, and make a U-shape flow, I might make a back to front.
00:29:59
Speaker
I might like break it up into four what we call modules essentially and then connect them together. So battery pack engineering keeps getting more and more complex as you have more and more cells. So if you I only had one simplest thing to do, electrochemistry problem, just basically put the cell.
00:30:14
Speaker
If I have 4000, 9000, all of these then get more and more complex to basically put together. no But why does it matter whether you do a U or you do modules or like? Right.
00:30:26
Speaker
So essentially comes down to how you're basically pulling current, right? Like how you're pulling power. So essentially power is voltage over time or voltage into current. And over time essentially and over a certain path. So you're essentially basically fighting resistance and inductance.
00:30:42
Speaker
So the longer your path, the more the resistance is. I could use aluminum. I could use copper. i could use the like I could use a lot of copper. I could use very little aluminum. I could basically join them with nickel.
00:30:53
Speaker
So ah there are multiple ways to do this. And they all have their own impact essentially on what the final product would be. So if I took even two-wheelers for example. If I took Ducati, let's say, or I took a Triumph automobile.
00:31:04
Speaker
I would have like... like copper wires basically ultrasonically bonded together and use the finest copper, join them as close to the cells and use the shortest path possible.
00:31:15
Speaker
So that's an entire engineering technique. Otherwise, if I'm doing anything like an e-rikshire, I'd basically just spot weld nickel in some basic configuration so I can just pull power somehow. So yeah, it just keeps getting more and more complex into mechanical and electrical.
00:31:28
Speaker
There's a thermal element to this, but that's its own separate thing essentially. Okay, understood. So you're saying that ah the... Resistance, which is decided by the material you're using, is one factor on cell connection optimization. Second is the path, how long it has to travel, is the second factor. And third is how fast can you put it all together? Like these are the three factors. Yeah, that's good.
00:31:50
Speaker
We'll summarize it Okay. Okay. Got it. Interesting. um What is BMS? BMS? Right. So it's the battery management system and essentially becomes the heart and kind of the brain of this whole exercise. Right. So if I have, again, just one cell, no need for a battery management system. I just have some kind of system which is pulling power.
00:32:12
Speaker
What I will need a battery management system for is when multiple cells connect together and basically form a system. So if I have, let's say, like few hundred cells, of a few thousand cells, what is looking at all of these cells and trying to figure out what's actually happening?
00:32:27
Speaker
So should I be pulling more power from here? Should I basically like, how am I monitoring temperature? how am I monitoring voltage? Are all my cells in the right kind of window? Are they safe? These kind of decisions are basically being made by one kind of electronics board, which becomes the BMS.
00:32:45
Speaker
Okay. Okay. So a BMS has an embedded software in it, which is able to route power accordingly and decide which cell it wants to draw power from and which is also reading data like there's some sensors in it which is able to see heat and stuff like that, heat and how much charge is left and things like that.
00:33:04
Speaker
Yeah, absolutely. yeah The embedded software is a pretty great way to put it. So it has microcontrollers. It has a whole like wave of circuitry, basically analyzing ah current flow, analyzing different voltages of all the cells, analyzing all the temperatures of multiple cells, and then basically calculating and computing what and how it should basically, let's say, pull power from the battery and then then basically give it out to the final system. So if there's an external kind of contamination of some sort of basically something happens from externally electrically or mechanically all of that essentially impacts this okay okay got it got it okay um
00:33:43
Speaker
i i i don't you heard about log9 facing some problems uh because of their technology choice uh can you help me understand what that was Yeah, so Log9 basically essentially was deploying a lot of LTO packs when they had initially started and LTO is essentially the lithium titanium oxide chemistry we spoke of, right? And Log9 is one of the companies essentially that had become pretty upfront about like actually kind of executing this across different automobiles. and They were one of the first companies to do that.
00:34:15
Speaker
I'd say two wheelers, some of the e-rickshaws they did, didn't even smaller some of the smaller buses, They were also responsible then for financing some of those batteries. And the issue here is the cost and then the time it takes to recover that. right So you're essentially in a 10 year lease for a specific system.
00:34:33
Speaker
And that is an interesting choice to make for a market that's moving this fast. right like You're essentially changing lithium forms every year. so to basically get into that long term lease, I think is one of the major reasons I think LTO hurt them but that being said the actual output of that system like how fast you can charge it what it can do in terms life cycle is amazing like you can get 10 years life you actually can get 12 minutes charging without doing much on the pack level because that chemistry is just so robust and so specifically designed for just doing this that yeah there is really no doubt from a technology perspective that there was anything kind of stopping them from scaling
00:35:12
Speaker
The hard part is in a market as dynamic as the EV sector, especially in India for the applications that we're going after, which is light mobility. And in the pecking order of automobiles, i would put light mobility pretty low, right? Like it's not, it's not like buses or like Tesla cars going up. And so To put in an application like that to then be able to finance over 10 years, I think is a big roadblock. And I think a lot of people have learned from that. So LTO, if I see, has kind of disappeared quite aggressively from two-wheelers.
00:35:43
Speaker
Most of them have still continued to use NMC, ah but some of them are also now starting to switch to LFP. And yeah, I'd say that, yeah, it's it's a huge burden on a business, right? Like was I'm trying to do, let's say 20 crores of business every month.
00:35:56
Speaker
Within 12 crores, I've racked up 240 crores of debt now. so and financing that over 10 years and financing that every year. So you're essentially looking at 250 crores of debt every year, which then has to go to 30% every year.
00:36:09
Speaker
Yeah, that's a hard one. Okay. So the, it was like a PMF problem. They they had a good product, but the the fit with the market was not there. Uh, Such an expensive product would not work for the kind of market which India has for EVs. And I think most people don't even expect the vehicle itself to last for 10 years. So ah like a 10-year lease for the battery is definitely a question mark decision. Got it.
Emerging Battery Technologies
00:36:33
Speaker
Interesting.
00:36:33
Speaker
ah What is the difference between NMC and LFP? You're saying that most light mobility, light mobility means two-wheelers and e-rikshars? Yeah, I'll say three wheelers too. so actually today, and NMC essentially is better energy and power for the same kilograms. In certain cases, mainly energy. Power, I think, is basically matched now.
00:36:54
Speaker
But for the same weight, I would essentially get more kilowatt hours out of the same battery pack. And now that's very critical for two wheelers because I only have a certain finite amount of space.
00:37:05
Speaker
So I can either put under my floorboard or I can put under my seat. And now within that space, I have to basically get ah basically a certain amount of power and energy essentially. So I'll have to drive one kilowatt hour and then have to drive maybe like few kilowatt from that same thing.
00:37:21
Speaker
So, if I see the spacing and the fitment within a vehicle, NMC just always puts at least 30% more energy which then translates to 30% better range.
00:37:34
Speaker
Now, this problem is not so common in e-rikshaws where i actually have the space. Like I have the weight, I have all of the kind of ability to be able to use LFP without any impact to rider. but In two-wheelers where I might have to remove the pack and carry it home, where have to basically always hit like 120 kgs on a vehicle level, that then drives people to use NMC. So Aether, Ola, TVS, Bajaj, even Hero for that matter, all use NMC.
00:37:59
Speaker
Potentially will use LFP in the future because it is improving pretty significantly. But yeah, I'd say today the main reason is the portability and the ease of basically getting a better watt-hour per kg.
00:38:13
Speaker
So what I hear is that LFP is fundamentally a better technology, but ah currently ah NMC has an advantage of miniaturization.
00:38:24
Speaker
ah Why is LFP fundamentally a better technology? I'd say it's better in two main regards. So specifically for India, one of the big advantages LFP gives is that the actual temperature that which it becomes unsafe at is a little bit higher.
00:38:41
Speaker
So and NMC starts getting unsafe at around 60, 70 degrees. So if you don't manage your system well and if you don't have a strong battery pack, you are going to face certain issues.
00:38:51
Speaker
whereas LFP can also have those issues, there is no lower risk of fire, but those issues start at around 80 degrees. Now that 10-15 degrees is enough of a window to basically give a certain amount of breathing room to a manufacturer.
00:39:05
Speaker
So allows most people to, I don't want to say design their battery pack poorly, but it is more tolerant to a poor design or to some form of just basic engineering. That is one advantage LFPS and that's specific to India.
00:39:17
Speaker
The other reason I'd say it's better is only that China has just dropped its cost so much that it's hard to really see how any everything won't become LFP. Like today, NMC most scenarios is around 10 to 15% per kilowatt hour more expensive than LFP.
00:39:34
Speaker
So yeah, I'd say cost and yeah mainly cost is the big advantage. to but For that matter, like power, energy, in some cases and NMC is also better. ah You'll see like most like EVTOL or some small planes or even performance cars will continue to use NMC.
00:39:49
Speaker
But most basic applications and even basic cars are switching pretty much all the way to LFP, mainly for cost. And that is the big driver for this market. so yeah Okay, so LFP is cheaper, even though not as miniaturized, ah which and more tolerant of heat, ah which makes it better for Indian conditions.
00:40:09
Speaker
um
00:40:12
Speaker
You know, I've heard about BYD doing some really cutting-edge battery technology stuff, really game-changing stuff. ah We've talked a lot about what has been happening so far. What what are the trends ah which you see going forward?
00:40:27
Speaker
Right. so the three big things that are happening now is one, there is a constant push to basically charge faster. I think there's a lot of work happening on the anode side to basically improve ah retention of lithium.
00:40:41
Speaker
And essentially what that translates to is when I'm charging very fast today, the big issue is that I'm seeing deposition of that lithium happen and it's creating like this hard layer over time. Like if I keep trying to like basically pull something back and forth from a layer, you're going to see something stick around.
00:40:58
Speaker
So how do I basically make a scenario where I can make sure that all of this lithium is basically always going and coming back. like So I give a hundred percent retention. So there is a lot of work that not just BYD, but pretty much every cell company is doing and figuring out better anode materials. Silicon is a ah new trend. Silicon anodes will become more and more common.
00:41:17
Speaker
Even it's already happening where some Anodes are starting to get doped with ah silicon. The second big trend that's now happening is the electrolyte itself. So this has been a pursuit for as long as batteries have existed is to turn the electrolyte into a complete solid state. So today, electrolytes in batteries are basically kind of a gel, so liquid-ish gel ah basically.
00:41:42
Speaker
and the biggest issue that creates is safety so now that you have this kind of movable electrolyte it creates this risk of basically joining the cathode and anode together like you always have this risk that the separator might get torn the electrolyte will like basically create some leakage in this path Creating that into a solid state basically guarantees that electrons are basically flowing through a medium which is just fixed in nature and that's never changing.
00:42:08
Speaker
So that volatility is basically gone. So making your battery pick that battery pack that much safer and that much more tolerant. And then the last one I'd say is just going to be alternates to what today are like. So producing Let's say better versions of lithium.
00:42:23
Speaker
That might be 10 different things, to be honest. Maybe potentially switching to sodium for better cost, switching to versions of ah lithium that allow, let's say, 500 watt-hour per kg, then allow them to go into planes, allow them to go into ships.
00:42:35
Speaker
And yeah, essentially just electrification for pretty much everything will happen only when safety, ah power and life cycle are solved for and energy for that matter. And all of these will just go on improving as we go. So you can see a lot of improvement already happening in the BYD blade cells for that matter, where they like starting to puncture the cells and nothing happens.
00:42:54
Speaker
And that's owing to the better chemistry and that form factor basically being that way. So you'll see that improve. You'll see the cell to pack architecture improve. So yeah, pretty much all the way around China is doing a lot of work in the chemistry side.
00:43:07
Speaker
And I think a lot of work, hundreds of other companies are also now doing on the pack and the electronics side and even the algorithm side. like Like we spoke earlier, right? Like lithium is still magic. Like batteries are still magic. Like nobody really understand, like I won't say nobody, not enough people really understand exactly what's happening on the cellular level. Right. And I think that understanding translating to different algorithms, different ways of charging, different ways of discharging.
00:43:35
Speaker
How do I make better electronics? How do i make this whole system cheaper? All of those will keep happening too. So a lot of work, even for the standards lithium cells, which I call, to basically create better systems out of them is going to be a large focus also. Because not everybody is going to have access to the best BYD cells all the time.
00:43:53
Speaker
Those will still go into 2030, all of that. But yeah, you'd see all those innovations on a system level happening right now. Okay, okay. That algorithm improvement is where India has an edge. like traditional Yeah, so algorithm improvement, even applications, right? Like today, if I take two-wheelers, three-wheelers, these are applications which China has looked at in very specific scenarios. Like they have amazing infrastructure for their two-three-wheelers.
00:44:15
Speaker
And the vehicles they already supplied to and India really couldn't do what India's vehicles demand. right So that's why you're seeing a lot of the vehicles become Indianized now. Even the battery packs for that matter. So all of that work will keep happening. I'd say application-based engineering for a lot of these systems actually improving lifecycle for those cells.
00:44:32
Speaker
producing better thermal systems, producing more miniaturized packs for different vehicles. And interesting, a lot of this work actually for ICE happened in Japan, right? Like you take the 80s, 90s, all of the two-wheelers and three-wheelers were derived from Japan. Like even today, the ones that run.
00:44:48
Speaker
That whole work actually hasn't happened in Japan for EVs yet. So I think India has a huge chance to basically create that standardization for this segment.
00:44:59
Speaker
using batteries as the kind of key focus. Now, whether the cells come from China, whether the companies set up cell companies in India, that I think is a different stage. But how do we create applications and systems around these standard cells, which then scale globally? I think India has a huge edge on.
00:45:15
Speaker
Interesting. ah What is the problem with fast charging? Why does fast charging degrade? Is it just degrading battery life or are there other challenges with fast charging?
00:45:26
Speaker
So, degrading battery life is the primary issue, but safety is also… It is the cycles. Degrading battery life means less cycles. Yeah, less cycles, lesser years than I'd basically signed up for. i I might have thought this might run 5 years, but now it just running 3 years.
00:45:39
Speaker
That is one. Safety is a big part of it and I'll come to that. And then the large one is just usability of the vehicle. And we'll just touch upon all three of these. So when I'm fast charging a vehicle, I'm essentially basically producing more current and more power.
00:45:54
Speaker
So on a cell level, if I went, I'm actually transferring ions much, much faster than I normally would. So this rate of transfer of ions basically coming back to how the deposition is happening.
00:46:05
Speaker
If I keep going this much, much faster all the time, then a layer will essentially start to create. And this layer essentially hardens over time and then basically reduces my ability to charge discharge again and again.
00:46:18
Speaker
So this is the first impact. So I basically have degradation in lower life cycle if I keep fast charging. The second one is safety. So now that I'm forming this hardened layer, I might actually still be basically going on charging and now this hardened layer can basically poke my separator and actually create a short circuit path now.
00:46:36
Speaker
So I actually have a huge safety concern within my battery if I keep fast charging and I basically damage my cell which then leads to thermal propagation, fires etc. And then the last impact of fast charging basically is on usability. Like this isn't so apparent in four wheelers but this is actually very apparent in two wheelers and three wheelers and some other applications.
00:46:55
Speaker
If I fast charge a vehicle, which is not, let's say designed adequately enough to ah fast charge, I will then not be able to discharge after that. I will basically hit my temperature limit. I will hit the limit of where that battery is basically exhausted its limitation.
00:47:10
Speaker
And now i might have to wait for an hour, hour and a half for the temperature to go down, for the battery to be able to accept more current, to then which I can then continue using it. So this is actually the very huge impact which users see, especially in hot climates. And this impacts pretty much everything. It impacts Tesla's too, but it's much so lesser because they have a cooling system.
00:47:31
Speaker
And they've kind of designed to the system in scratch. and Okay, interesting. So you're saying the battery has some sort of a cutoff system if it hits a certain temperature and stops charging. So you have to wait for the battery to cool down before it will continue charging all the way till full. Absolutely, yeah. Interesting. Okay.
00:47:47
Speaker
And ah what is the blade cell by BYD? What is the innovation in that? Why is everyone talking about it? Yeah, so the BYD blade cell is essentially a standard LFP cell.
00:48:01
Speaker
basically produced in a unique form factor. So what they've essentially done is they've obviously changed the chemistry of the anode cathode quite a bit to basically make it in a system that you can actually kind of keep in that long, thin kind of form factor. But...
00:48:14
Speaker
even this construction of it is very different so they've essentially taken longer strips and basically stacked them ah instead of creating like a whole roll which normally cells do so the innovation here is in construction more than the chemistry here like how do i take a long flat cell how do i actually bond it how do i make sure it's stable all of those are the innovations and the real advantage of that cell then shows up at an application right so in a car When I want to keep my let's say ah the height of the car low, I want to only use the base, I want to basically use it as much as possible.
00:48:47
Speaker
I can now use a lot of blade cells arranged in a line without much need for other materials and basically form a battery pack. They have actually done quite well in certain vehicles. There are a so certain number of issues scaling that battery pack because like anything, it is a new construction and cells, when of they're rolled and basically created, there is a lot of, let's say, experience and expertise around that construction of cells.
00:49:14
Speaker
So there is a little bit of a climb where they're basically figuring that out. That being said, a lot of cars are already using that. So it does work. There is nothing stopping that. But most of the advantages basically show up to basically see watt hour per kg, basically the weight, the final weight in the range you get and the safety element of it. Because since you made it so thin and spread out across a longer surface, the chances of propagation and continuing that are lower.
00:49:39
Speaker
That hasn't been completely proven, to be honest, because I have seen instances. But in theory, that is correct. Like it's basically spreading over larger surface area. So you will basically be able to resist more heat, essentially.
00:49:52
Speaker
Okay. Okay. Okay. Interesting. ah Why do ah ev companies also want to be battery makers? and I think Tesla was possibly the pioneer with their gigafactory.
00:50:04
Speaker
Have they invested as much in the battery manufacturing as they've invested in their production of Tesla cars in terms of the capital investment? Yeah. I'd say it'd be pretty equivalent. So the good thing for them is the Gigafactory also pumps into a lot of cells to the energy storage business. So basically all that test the Tesla Powerwall or Megapack.
00:50:23
Speaker
But for Tesla, it was also... I'll ask this in two questions. For Tesla, it is very important to do it because Being the first company, you have to kind of propagate the entire ecosystem. Like you have to get the customer used to everything. Right. So that's where they had to do charging. They had to do literally everything. They went all the way to producing cells, which they didn't initially start with. They were using Panasonic cells for the longest time.
00:50:44
Speaker
But they were hitting a wall in terms of how quickly even Panasonic was innovating on a cell level. And that was really the main reason they started. So they wanted a bigger cell. They wanted more energy and power from the cell.
00:50:57
Speaker
And a lot of the innovation basically didn't come fast enough for their basically needs. That being said, they have also now started use Chinese sales, like for a lot of their LFP applications in China are using Chinese sales.
00:51:10
Speaker
A lot of their vehicles in ah basically Europe and US use their sales. So it is split. So but Tesla, it is very important to be vertically integrated. And you see that in China also like BYD, for example, is completely vertically integrated. so The biggest benefit and for an OEM is cost and quality. right like If I have complete control over my cost, I'll know 100% what's going in. I also have complete control of the factory, so I'll know exactly what quality goes in.
00:51:36
Speaker
That system though, I personally feel doesn't really work for every automotive OEM. And today, if you see the world, it really is only working for those two. And they're clearly standing out because of that. right like Their margins are better, their businesses are booming, they're moving at a rate nobody else can move at.
00:51:53
Speaker
I personally feel that a market that stabilizes, where a market like where everybody is doing what they're best at and now creating a system where the margins have stabilized, in that world, it's not going to be 100% necessary to do that. And that is also playing out in China, where you see CATL basically working with five, six OEMs at the same time and competing head on with BYD.
00:52:16
Speaker
so Yes, it's beneficial for an OEM to do all of that. But no, not everybody is BYD and not everybody operates like that, to be honest. And not everybody wants to. I think it's a completely just kind of insane way to operate. I know how they work, like the work ethic and all of that also. And not everybody works like that, to be honest. ah So, yeah, I'd say it definitely helps.
00:52:39
Speaker
But it comes at a cost. It comes at a very significant price. ah Ola also wanted to start a gigafactory, right? Like, And it's still doing it to be honest. They're in process. They're producing prototype sales from what I know. I know they've already started putting it into certain vehicles. I don't think those are like production ready vehicles. But yeah, their whole but they pitch in a way, like at least when they went to IPO was that their gross margins just like significantly improve when they start producing their own sales. And again, in theory, that makes perfect sense. right like You're already paying a certain premium to import these.
00:53:11
Speaker
But what's also happened in the three years since they started producing your is interesting to see that the prices of sales have dropped so much and that the duties have also dropped so much that I would be keen to see if Tesla's sell, like even when it comes but comes out, will be as competitive in cost. Like eventually if they get to a yield which is high enough and they're actually like then pumping out sales at like gigawatt hours per month, then sure, like i there's nothing to doubt here.
00:53:40
Speaker
But ah yeah, I've seen the climb for a lot of these sell companies in the past, just having kind of interacted with some of them. And it's a 400 million dollar five, six year climb to get to 99.99 some percent. Right. and China's whole country's ecosystem was basically furthering all their cell companies to work together and compete together at the same time.
00:54:04
Speaker
Ola is a little bit alone in this, to be honest. And I think it's also like super commendable to see, right? Like every other cell company in India, if you see what they're trying, is basically getting some Chinese company to India and like working with them.
00:54:16
Speaker
Ola is genuinely like fully engineered, like over here, but like near Bangalore. They're obviously inputs from different parts of the world, but they actually have an R&D team that actually producing those cells.
00:54:27
Speaker
So yeah, if it works, there's nothing like it. But yeah, just super commendable. But yeah, it's extremely hard. insane. I think possibly like, you know, in the world of chips, NVIDIA is does not manufacture chips. Like it's TSMC, which makes chips for every chip company, be it NVIDIA or AMD or whatever, except for maybe Intel.
00:54:48
Speaker
ah And possibly the reason is because the technology progression is fast. ah You keep moving from one generation to next generation, then you need to do a lot of investment. So you need massive scale.
00:54:58
Speaker
ah And possibly if you are making chips only for yourself, you will not be able to keep up with somebody who's making chips for many players. No, and that's what's playing out today. Like you see us ah like extreme amount of consolidation cell companies also, right? Like and two years back, there were hundreds of them and hundreds them all across the world. Like the US had 10, Europe had like five, China had gazillion of them.
00:55:23
Speaker
Europe has none now. America's left with like a couple of them, which will be interesting to see if they get to scale. China has only two really dominant players with a lot of other players just serving smaller markets across the world.
00:55:34
Speaker
And it's for exactly what the reason you said, right? Like if I get so good at one thing, let's just keep doing that till I get everybody's market share. Interesting. Okay. ah Who's the other cell company in China besides BYD?
00:55:48
Speaker
CATL. They're actually yeah the largest in the world now. You've worked with... the the two big ah EV ah companies in India, Ether and Ola, you've seen that ecosystem maturing.
00:56:03
Speaker
ah What is the state of batteries in the Indian EV market, especially the light mobility market? ah I believe for a long time there has been this debate between swapping versus fast charging and things like that. ah Tell me a little bit about that.
00:56:18
Speaker
Yeah, absolutely. So today, if I say the market's actually pretty split open, right? So if I take all of the consumer based vehicles, like if I take Bajaj, Ather, Ola, TBS, all of them are primarily charging focused. Like they're pretty much every vehicle comes with its own charger. You can plug it into a socket and take anywhere between three to eight hours based on what kind power of charger you use.
00:56:42
Speaker
And that is the dominant way of most consumers using their vehicle. The problem is that is usually the first leg of EV scale. Like in the beginning when you're essentially starting to scale, only certain people who have, let's say, a company charging their homes or have a very, very specific way to charge it maybe their office or some location can continue to doing it.
00:57:01
Speaker
But once you get to a very large ecosystem, the fueling pattern that you're seeing today with ICE vehicles has to be replicated in one way or the other. Now, one of the most dominant ways in the last 10 years, especially for two wheelers has become swapping.
00:57:15
Speaker
So this started primarily with Gogoro in Taiwan, where they essentially built up an entire two-wheeler vehicle company. ah They built up the entire swapping ecosystem around it. And basically you open up your seat, pull out a battery, stack it into a station, pull out another battery from the station and then put into vehicle. So what you put in was at 0%, what you get in is 100%. you get a certain amount of range, usually like 40, 60 kilometers per battery.
00:57:39
Speaker
And then you're essentially good to go. And then these stations are usually spread all across the city, so you can use them at your ease. Now, in theory, this is the absolute best system there is. very like this In terms of convenience, in terms of actual usability, replicates fueling to the most like but the most time like use case possible, like two minutes, both.
00:57:58
Speaker
yeah But the issue here is that on paper, and we've not seen this happen yet, and potentially is possible to do in India, which a couple of companies are trying.
00:58:10
Speaker
The unit economics of this don't work as well as they should. And primarily it comes down to the fact that all of these swap stations require a significant amount of capex. You have to set them up in public areas. You have to set them in areas where you can get high power.
00:58:24
Speaker
Potentially some of these need to be air conditioned to keep them at the right temperature. And over and above that, if I have 100 vehicles in the market, I at least need 30-40% more batteries.
00:58:36
Speaker
So essentially ah paying for those extra batteries to be sitting in these stations also. So all of these things combined, plus the amount of capital it takes to scale this, right? Like you need to basically be putting swap stations all across the country.
00:58:50
Speaker
is always going to be more excessive than if you were to just use charging as an ecosystem because I'm just connecting the same charger which is in the swap station basically directly to the wall and using my vehicle. Now the issue is again that the time of charging is too large.
00:59:03
Speaker
But if that time of charging could let's say instead of three, four hours basically be like a 20-30 minute charge, this changes everything now. You basically improve that rate by almost 10x and you're now in a system where okay even if swapping takes two minutes versus a 20-30 minute period, the actual unit take on economics could allow your system to be so much cheaper over time that it's most likely going to be in a situation that a consumer will prefer it. And This is the actual mentality Ola and Aether also took. Like Ola and Aether both typically used to be a little bit anti-swapping because of all of these redundancies you have to create within the ecosystem, like extra batteries, extra stations, extra everything. I don't know exactly how much I basically invested in, right? Like I'll never know. Like I'll always have a little bit more.
00:59:48
Speaker
And sadly, this has also played out for Gogoro not the best way. Because if you see them over the last 2-3 years, the amount of batteries they're basically adding versus the amount of OEMs and vehicles they're able to add is a giant difference. So it is always going to be like a kind of kind of catch-up game where they're always trying to convince more OEMs to come, but they're also trying to sell, but also setting up more capex.
01:00:11
Speaker
So from a conceptual perspective, if fast charging works and works fast enough, then it makes perfect sense. But the problems have always been that fast charging has been actually pretty slow, like it's one to two hours.
01:00:24
Speaker
Plus the impact on life and the actual impact on my TCO and the impact on my usability the vehicle is so ah high that I really can't be doing it again and again. So the holy grail here is can I charge fast enough for the lowest unit economics and then actually get good life?
01:00:40
Speaker
So if that actually happens, I feel like swapping obviously then is a little bit of a transition solution. Now, this hasn't necessarily been the case in India where you see there's three, four companies scaling very aggressively across the B2B sector in two wheelers, also scaling e-rickshaws.
01:00:55
Speaker
but Because till recently, I'd say till like one to two years back, It really wasn't possible to fast charge any of these products. But in the last couple of years, a couple of companies in India and even few companies globally ah have started to like fast charge these vehicles.
01:01:09
Speaker
And I feel like even within that, there's going to be a lot of approaches like what will be my ecosystem? How will I set up these chargers? Where will I set them up? What kind of chargers? What kind of batteries? All these questions will then result into different decisions companies make, which then give rise to different solutions. So I don't think it's a complete yes and no that okay fast charging is better than swap. There are certain applications which potentially swap can keep continuing, like China swapping truck batteries. So maybe that's the right way to do it.
01:01:36
Speaker
But I personally feel for a market where unit economics matters, where total cost of ownership is my only focus and convenience is secondary, there fast charge makes perfect sense. There is like no question there at least.
01:01:49
Speaker
Okay. um So... The hit on total cost of ownership by fast charging is essentially the battery life going down. Absolutely. Yeah. You're essentially signing up for three years, but only got like one and a half, two years. So if there were companies who could essentially maintain their three years or even extend three years, yeah, it's an absolute no brainer to be fast charging.
01:02:10
Speaker
Okay. And just for my listeners, I want to clarify this concept of total cost of ownership. Um, the uh this concept was essentially born as a way to make evs look favorable in front of ice vehicles because in an ice vehicle uh you are typically paying less than an ev vehicle but in an ev vehicle you are saving money because the cost per kilometer is lower so just to make an ev look more favorable you look at the total cost of ownership like over a three-year period if i ran an ice vehicle for
01:02:41
Speaker
one lakh kilometers, I would pay cost of vehicle plus cost of fuel for one lakh kilometers and service and maintenance. Whereas for an EV, that same thing, while the cost of vehicle might be higher, but the cost of energy and service and maintenance would be much lower. So over a three year period, the total cost of ownership for an EV would be lower.
01:02:57
Speaker
And therefore this term of total cost of ownership is a standard term used by the EV industry. um Just as a clarification for listeners.
Energy Solutions and Business Models
01:03:06
Speaker
Okay. So, ah You're saying that there are B2B companies which are going all in on swapping. Which are these B2B companies?
01:03:14
Speaker
Yeah, absolutely. Sun Mobility, Battery Smart, Yulu are obviously the big ones today. ah They're basically doing two and three wheeler. Sun Mobility also does much larger vehicles. But ah yeah, across the three of them, they have pretty much done like millions of swaps. yeah The idea is that Battery Smart is scaled across e-rickshaws very aggressively in the north.
01:03:34
Speaker
battery smart is doing vehicle plus battery or only a swapping service they do a swapping service so in fact they today purchase batteries and charges from different companies and work with the different people to do like a franchise model for swapping where they are essentially more of the platform the operator for swapping but not really so much the technology behind swap got it and sun mobility Sun Mobility is actually both ways. So, Sun Mobility has an integrated tech stack where they have the battery, the swapping station and the entire electronics behind it is in-house.
01:04:07
Speaker
And they're also responsible for setting up those stations and providing those batteries to multiple fleet operators or different companies, essentially. So, they're more end-to-end, per se. yeah okay Okay. And YULU, of course, is like for gig economy.
01:04:19
Speaker
uh workers who want to rent a two-wheeler so they for them like battery swapping is how they uh recharge it okay got it so now what you're saying is that uh fast charging practically uh even with solving the uh life problem like the life degrading even if you solve that it'll still take 20-30 minutes which is not a petrol ah like a petrol fuel kind of an experience, which is a two, three minute experience.
01:04:48
Speaker
um But fast charging is significantly cheaper, ah especially for fleets where ah you have high usage of vehicle.
01:05:00
Speaker
And the reason why it's significantly cheaper is because cost of the station, the fast charging station is much lower than the cost of a battery swapping station. ah Because for a fast charging station, you just need that fast charger.
01:05:13
Speaker
ah That's it. That's the only investment you need. Plus, of course, electricity but is like the operating experience. Whereas for a battery swapping station, you need whatever, like 100 batteries to be installed there in that station. What is the approximate difference in capex for battery swapping station versus fast charging station? Like, is it like a 10x difference? or I'd say it's at least 4x. Like for the same capacity, for the same number of riders, it at least is 4x. And the one big caveat here also is that it's actually when you're operating a swap station also,
01:05:46
Speaker
like Let's take Yulu as an example. right They're literally taking rental for an actual shop where they're like fully air conditioning that shop and like setting up the station inside the shop. Whereas, yeah for a charger, I can literally just set up like these poles pretty much all across the city. and and So the the operating expense is also much higher for a swapping station. yeah and know One stage beyond that, just to maybe elaborate on the time part. So 20, 30 minutes,
01:06:11
Speaker
For most use cases, i agree, it's still a lot of time, right? like You will still basically see like that mindset of doing, let's say, like a five-minute petrol refuel. But today, specifically, the use cases we go after,
01:06:23
Speaker
are actually solving that while doing the downtime. So we can come to that. But the idea is basically, how do you design an ecosystem where now I start to use a vehicle like a phone, right? Like nobody knows how much time a phone charges in.
01:06:35
Speaker
Literally, I can guarantee nobody knows how much time a charges in. True, true, true. You sporadically charge it. Yeah, true, true. That's the intent here. Like how do you start using a vehicle like a phone? That's the intent here.
01:06:45
Speaker
Very interesting. Okay. That's a good way to put it. Okay. um So this is ah essentially the problem that ah you have set out to solve at Emo? Yeah, absolutely. Yeah, this is one of the... The cost of energy, like essentially build ah the next generation HPCL ah and Indian oil and BPCL. So the next generation of these will be companies which are providing energy to two-wheelers. So is that what you're building at Emo?
01:07:15
Speaker
Absolutely. That's definitely one part of it, right? So today for quick commerce, which is the segment we've started and last mile mobility, which is a broader segment that we're working on, actually providing the energy as a service, basically getting to the point where you can now start guaranteeing to the user the actual cost of every unit of electricity that really is a long-term focus for emo so how do we basically more efficiently use our batteries how do we connect the more efficiently chargers how do we make sure that the charges and wherever it's taking from electricity from is the cheapest electricity can get how does it manage that over the day all of those problems then basically finally impacting the life of the battery and the total cost
01:07:56
Speaker
All of those problems is what Emo is solving. And we're starting with last mile, like i mentioned, but then the intent is to go much bigger and basically take a multiple applications as we go to scale. Okay. ah The things you mentioned, at the charger, the battery, things which you're solving at Emo, the charger, the battery, ah the lowest cost of energy, like to charge that. These are the three broad things which you're solving.
01:08:19
Speaker
Yeah, absolutely. Yeah. The interplay between the battery charger and then the entire service around this whole ecosystem. Yeah. ah Let me start with lowest cost of energy. If I have a charging station in Bangalore, isn't the cost of energy set by the Bangalore, whoever is running the Discom, Bangalore Discom distribution company?
01:08:41
Speaker
What is the way in which you can reduce that cost? Right. So today, if I basically take any one specific charger in Bangalore, right? Like you'd essentially be paying a certain unit rate for electricity over the day.
01:08:53
Speaker
But what's happening is if you essentially go through your whole build, there's a lot of line items. So there's time of day, time of season. You'll basically load some where you pulled the part from. how much like over the commercial limit you pulled it. So there's a lot of impacts of all of these small things which basically, basically impact your final electricity bill. So... You're saying the discom doesn't charge a flat rate? Like 10 rupees per unit flat? That's not the way how it happens. No, that's going away. So there's a lot of like plus minuses based on the day timing, plus minuses based on the season, plus minus based on location.
01:09:26
Speaker
Even you' based on your amount that you're consuming, it's basically over a certain load. All of these things impact your final bill. And this is… It's like a surge pricing… so So you're saying discoms have surge pricing?
01:09:39
Speaker
Surge pricing pretty well defined in a way. But different state to state also for that matter. Like different states might have their own way of doing this. Which will then basically impact my price of electricity in Gurugama very differently from what will be in Bangalore for example. And the intent for any high-tech business is to standardize the energy cost in the future. so QuickCommerce being one of those that rely very heavily on moving energy from point A to B is going to kind of be defined by what their cost of energy will be in the future.
01:10:08
Speaker
Okay. Okay. So, but like, basically, the non-peak hour usage of electricity will be cheaper, but very simplistically. Absolutely. And even for that matter, like,
01:10:19
Speaker
Can I set up solar somehow there? And can I use some of that? what time of day do I charge that solar at? What time do I charge charge the battery at? Like all of those combinations now behind the charger will actually lead to a lot more savings. So what the intent for Emo is that we're already collaborating with a lot of commercial establishments which have fast charges outside, but have a battery and solar as part of that establishment, basically to now do all of the energy buffering and the energy transition back and forth from the vehicles to the grid.
01:10:48
Speaker
Okay. ah Is it worth it ah in terms of the savings? I mean, if you're saving ah like 5-10%, it may not be worth it doing so much like installing a battery, installing solar. you know What is a possible saving that you can get by doing all of this battery and solar and all?
01:11:05
Speaker
So the savings today are a little variable based on where you go. But I already know that there are companies now using solar with battery and pricing electricity a less than 5 rupees a unit.
01:11:18
Speaker
This is almost impossible to do if you basically pull from the grid. Like you're pulling in 8.5 to 14 rupees a unit for most cases when you pull from the grid. And the idea is that even in some states where we're working, off peak power is 3 rupees a unit, on peak power is at 10 rupees per unit.
01:11:34
Speaker
Plus, even in places like Mumbai, for example, it's plus minus one rupee per unit. So I might be paying nine and a half and for two three hours a day, I'm paying 10 and a half. So it's not 5-10%. In fact, a couple of the businesses we're establishing ah these kind of energy storage systems for, you can see a 30-40% improvement over just ah over what you had just using batteries and very small amount of solar. So if you were really able to respect size your solar battery charges really well,
01:12:01
Speaker
I'd say easily 40% and while making that return back within a year. That is really the focus and and that's how big this will get because The future also allows you to do a lot of energy trading now. And this is a whole new world that will open up in India, right? Like with multiple people set up microgrids and sell and buy back energy back and forth.
01:12:19
Speaker
So now you're essentially fighting for paise over time, which then accumulates to lot over, let's say year. So in fact, a very large mall in Mumbai who we were working with, we essentially saw their bill was 1.7, 1.8 crores month.
01:12:33
Speaker
And even just by doing time of day, time of season, some wheeling loads, putting a BESS there of a megawatt hour, we were able to see like a 10-15% improvement in their build, which if you take over a year, is actually more than what it basically caused them to put up the additional KPEX. So yeah, I think it's going to be huge.
01:12:50
Speaker
What is the BESS? You said you put a BESS of one megawatt hour. battery energy storage system. So it's basically like a battery energy, a battery basically put into a system where you can now yeah use that as a static energy storage system.
01:13:03
Speaker
Okay, interesting. Okay. And by energy trading, you mean like say, in the non-P car, you can draw an energy at three rupees a unit and in the P car, you're drawing it at nine rupees a unit.
01:13:14
Speaker
So, you can draw and store energy at 3 rupees in it and sell it back to the grid ah at when when the grid is at a costier level. Maybe they'll not buy at that 9 rupee, but they'll buy definitely at much more than what you paid for it initially. Absolutely. And in the future, the intent is that you could sell it to someone else.
01:13:32
Speaker
but Because once the whole energy trading microgrid market is opening up in the next year, so open like it's already there for large amounts of power. But the intent is to open it up for everybody. And that will be huge then. yeah what What is this? Is this a regulation? what is soical The regulation today is that if I basically have a solar farm and if I have above a certain amount of power, I think that keeps changing, but it's around 200 kV right now.
01:13:58
Speaker
I can basically sell back to the grid. I can produce that power and sell it back. And if I'm in a certain scenario, even above a higher value, I can sell it to someone else also. So as a private entity, I can sell it to another private entity at any predetermined cost between us.
01:14:13
Speaker
And then that allows a scenario where it once this power level drops, maybe 50 kVA or 100 kVA, or even if it's 1 megawatt, multiple people will have their own small solar and battery farms to basically produce and then sell electricity. And that will basically be a game changer to, let's say, how even the grid works overall.
Energy Trading and Regulatory Challenges
01:14:31
Speaker
So, ah like for the equity trading market, you have SEBI as a regulator and you have NSE and BSE. What is the equivalent for this energy trading market? Like, is there regulator? Are there exchanges? How do these deals happen? And how is the energy moved? Who's running the pipes? And just little bit of a diversion from our main topic, but I'm just curious.
01:14:51
Speaker
No, so there is an open exchange forum. I don't think there's anything as ah clear as like an NSC for this. It is forming. So a couple of entities are doing it, CESL and a couple of entities are, let's say, ah focused on this.
01:15:03
Speaker
But ah it's essentially very clear on a DISCOM level. So it's usually DISCOM trading. So that's become pretty straightforward. But there are, i'd say, interfaces people are setting up, even on national level as we speak, to mainly expedite this in the future. So there are a couple of companies doing that.
01:15:21
Speaker
Which interface actually picks up and then basic becomes a standard will be interesting to see. But yeah, it's in process, I'd And the pipes would be these power transmission companies would be running the pipes or even the discoms would be running the pipes which allow the trading to happen between two private entities.
01:15:37
Speaker
Right. So the interesting thing is a lot of this today actually is completely virtual. So I'm basically like producing and selling it back fairly virtually. So the piping system is pretty common when i have like actual solar banks near a grid where I'm actually producing and helping it.
01:15:52
Speaker
But a lot of this is that, okay, I am, let's say, a giant institute. I have my own solar. I took that solar and basically sold it somewhere to some diskom. And now I'm buying this diskom here.
01:16:04
Speaker
So I don't actually physically transfer that. But I'm basically balancing it out virtually. ah Got it. Okay. Right, right, right. Okay. Interesting. Okay. So this is one theme that you're solving, lowest cost of energy.
01:16:16
Speaker
ah Is this sold as a service or as a asset, like you price it as an asset, which means that you charge whatever five lakh rupees to install BES and that's how you earn or do you sell it as a service where based on every unit consumed, whatever. I mean, how do you price this?
01:16:36
Speaker
Right, so today we actually do both. So for a lot of the applications, I'd say, so let's take ah two wheelers as an example. So today we have Domino's which we work with. Domino's actually buys full products, like they're not really very interested in the service part of it. They run the service themselves.
01:16:51
Speaker
So they're actually buying vehicles that are already fitted with our batteries and then using fast charges that are already installed at Domino's stores to basically fast charge those vehicles. So in that scenario, we're usually just selling these outright to a vehicle OEM, which establishes a solution and then gives it to the end user.
01:17:07
Speaker
But in a lot of these where we're working with quick commerce companies like Blinkit or even BB Now, the intent is to basically give ah flat rental to the rider or to the fleet operator, which then covers everything. It covers the access to the vehicle, to the fast charger, to the battery, electricity for that.
01:17:24
Speaker
communication, access to the app. It's a flat monthly rental the rider is paying. And that goes through us. We are essentially responsible for the energy portion. But we are facilitating this whole ecosystem because all of this revolves around the concept of fast charging. The concept of setting up fast chargers within the dark store itself and operating this as a new model.
01:17:44
Speaker
So in the future, we see this becoming... A system where we are selling assets to different parties, where we let's say sell chargers and energy storage systems to Darko store owners and they run this and then we sell batteries to OEMs and fleet operators.
01:17:58
Speaker
But today we're doing a lot of this to basically promote and actually propagate this all over the country because actually creating this ecosystem has a lot of moving pieces and then the entire ops for it and actually scaling this for the first at least thousand dark stores, even for the first 10,000 dark stores, doesn't matter, we're doing it.
01:18:15
Speaker
Beyond that, we see a lot more people getting involved because the problem has always been the asset reliability. Like the reason EVs aren't scaling, the reason this is not becoming a norm is that, right? Like how do I make sure I can use this for an exact amount of time and get the return I want?
01:18:31
Speaker
So we see more and more people becoming partners with us long term. But today, yeah, we're essentially doing both sale and service.
Production and Market Positioning
01:18:38
Speaker
Okay. Okay. um How much revenue do you make from ah outright sale?
01:18:45
Speaker
So at least 70% of our revenue is coming from outright sale. The idea is that the leasing system but revenue is scaling pretty consistently because it's accumulating over time.
01:18:57
Speaker
But we do almost a thousand batteries a month. And yeah, the cost for the batteries will vary anywhere between like 12,000 to 17,000 rupees per kilowatt hour. So we're scaling from 1,000 packs a month to almost 1,500 packs a month in the next month or so.
01:19:10
Speaker
And that's a pretty consistent plan for us. So what you're selling is ah ah battery, a BES, which is a battery energy system, which includes batteries and solar if needed.
01:19:26
Speaker
ah Besides that, you also sell battery standalone for vehicles and you also sell chargers. ah These are the three things that you sell. yeah absolutely. And all of these actually connect on our software, which is the one big part. like It's a full energy kind of management platform, which not only today is scaling for our packs, but is actually now starting to scale for other people's systems also.
01:19:47
Speaker
But we are essentially responsible for batteries end to end. Chargers are obviously a big part of it because they are the kind of portal. but All of our innovation and most of the team's focus on R&D is basically how do I maximize battery life and how do I make sure that they keep getting better charge rates over time and to get more power over time essentially.
01:20:06
Speaker
ah Okay. So I guess the way to understand Emo is battery as a service, is the long-term model. Currently, it is happening through asset sales, but ah long-term, it will be battery as a service, which would need you to handle the charger, the software, ah the battery itself, all of these things you would handle at your end.
01:20:28
Speaker
um but So do you also manufacture batteries then? Yeah, actually, we have our own ah battery pack assembly unit near Bangalore today. We essentially today only buy cells.
01:20:39
Speaker
Pretty much everything else we fabricate from scratch, like all the plastics, metals, electronics, the sensors that go into it, the entire firmware, all of that is done from scratch. So, yeah, we've essentially been running that facility for the last three years now.
01:20:52
Speaker
And every single prototype that we've ever produced, every single battery that we made has been made within under that roof. And what's your capacity there? How many batteries or what? Today it's set up for 2,000 batteries a month.
01:21:05
Speaker
So it's essentially doing it on five megawatt a month. But we are actively scaling it now to basically get up to 25 megawatt hours a month. Basically, it'll give us one gigawatt hour capacity by the end of this year. OK.
01:21:16
Speaker
oh What does that mean? um If you look at, say, what was Log9 doing or what what would be these household names like Exide and all be doing ah not for their lead acid battery, but for the lithium ion and the EV kind of batteries, what would be their capacities?
01:21:34
Speaker
I'd say it's today actually active output for most of us is in the single digit megawatt hour per month. I wouldn't know to be specific what peak megawatt hour they do, but just to put in context, like for two wheelers at least, most of these batteries are two kilowatt hours.
01:21:51
Speaker
And um yeah, if you're doing, let's say a thousand of them, we're doing, let's say two megawatt hour. So I know for a fact that they were doing a few hundred a month. So maybe they were doing like a like five megawatt hour a year or something.
01:22:02
Speaker
We're essentially that around monthly. But ah yeah, it's kind of scaling that. That is compared to Log9. What about these? Who are the other big... I'm not very vocal about this, to be honest, because they actually supply like just like multiple things here and there. But it's hard to get a split off.
01:22:20
Speaker
So I just maybe put Ola in context, like maybe let's take Ola. So today they're doing almost like maybe like 60, 70 megawatt a month. Because they have 20,000 vehicles, let's take, and four, like three kilowatt hour each.
01:22:33
Speaker
So that's almost 60 megawatt hour a month. Okay, okay. ah but But you would be in like the top five in terms of your capacity to produce batteries in India?
Charging Infrastructure and Standards
01:22:44
Speaker
I'd say there are multiple versions of companies within this, right? Like there's, ah let's say like you're all your basic companies in the NCR region, which basically produce batteries for e-rickshaws.
01:22:55
Speaker
I think on that volume is pretty high. So if I had to take just a two-wheeler energy focused deep tech kind of startups, definitely. yeah But ah yeah, that pool keeps getting more and more complicated as you grow it, right? Like because you have some golf bat car battery companies also. You have like telecom battery companies, you have mobile phone battery companies, you have like pouch battery companies for like small portable batteries. So, yeah, they're also all battery companies. But yeah, within the segment, we operate in Frishtorea.
01:23:23
Speaker
Okay, okay, okay. Understood. Okay. Okay. And you manufacture the charger also? Yes, we do assemble the chargers ourselves now. or We essentially, first when we started was purely focused on the batteries, but have realized that the actual ability to control the charger then gives us a huge influence on how we can res scale this market. So, yeah, we're setting up our own charging network.
01:23:44
Speaker
We have almost 800 points in India today. And that should be up to like a few thousand in the next three to four months itself. ah These are ah what? like Like these are.
01:23:55
Speaker
This is like a service business where you get paid per unit of energy consumed, or is it like an outright sale of a charger or a franchisee run? What what are these 800 points? So today, some of them are essentially outright sales to like a company like Domino's, which just operates it. But a lot of these are actually being operated on a rental model for the companies like Blinkit. So the riders are paying us a monthly so like lump sum amount and the charger is completely factored into that. So it basically amortizes over 15 months or so and basically recovers in 15 months or so. And the idea is that
01:24:28
Speaker
Today, the charging network we are setting up is specifically B2B focused. So we already have a captive customer. like So when we set it up, let's say we'll set up five fast charges in one blinked dark store.
01:24:39
Speaker
So now that have, let's say, 50 riders who are now going to use it. We're already very clear that this is going to get utilized 18, 19 hours a day. And they were not hoping that this would like, let's say, get to a certain utilization someday.
01:24:50
Speaker
Because today, um from a utilization perspective, when it comes to fast charging, I think would be one of the highest. Because we have been very clear about setting up a very captive network, which then goes along with our battery-powered vehicles.
01:25:04
Speaker
And yeah, then interfaces directly with the store who we work with. Okay, okay. I'll come to the Blinkit model, your engagement with them. But ah Let me go a little bit deeper into the charger.
01:25:18
Speaker
I believe the chargers also went through a format war, like what is the best format of charger and all. Just give me like a history of chargers and what what does Tesla use as a charger? What are the standards in this different countries are using? Are they compatible with each other?
01:25:33
Speaker
Because fuel is like, you can go to a BPCL or an HPCL or an Indian oil and you will get ah roughly the same thing. There is no ah compatibility question mark there.
01:25:45
Speaker
What is it like with chargers? Just take me through that journey. Absolutely. ah So there is there has been a charger war, um I'd say on the bigger vehicle side. de If I take back maybe 10 years, there were almost four standards. So there was the CCS standard, which is like the popular European American standard, CHAdeMO, which is a Japanese standard, a couple of others I'm forgetting, GBT, which is a Chinese standard, ah and NACS, which is the Tesla standard.
01:26:12
Speaker
And all of them, I think, are still fighting a little bit. But what has become the global standard of the last 10 years is CCS2, which now Tesla's charger is also replacing with an NACS in the US at least. So CCS2 in India at least has become a standard for cars, for buses and for anything which is what I call high voltage. So anything on the bigger vehicle side.
01:26:35
Speaker
But that hasn't really translated to like light mobility or anything smaller because most of those are low voltage systems so and they use lesser power. On the bigger vehicle side, there is some consolidation on the charger connector standard and the protocol. So it's CCS2 with a similar protocol and some people are fighting with the Tesla converter, but that's also like you can attach it and then make it an adaptable connector also. So that's kind of solved, I'd say. but They have a different problem where now multiple companies have different apps to then like use those chargers.
01:27:08
Speaker
So that is its own problem. But that first stage of the problem where the connector itself is not solved for is actually still the case in two, three wheelers. Because if I take Aether, Ola and TVS and even Bajaj, even Hero, they are all use different connectors.
01:27:25
Speaker
Only Aether and Hero uses the same standard charging system. But ah pretty much everything else uses their own standard and they're really not agreed amongst each other as to what the future has to be. So that is a big open point to the light mobility segment.
01:27:40
Speaker
But yeah, I'd say in the four-wheeler segment, that's somewhat clarified today. So that's where you'll see a lot of companies scaling a four-wheeler charging network. so you'll see ah Yeah, ChargeZone, Tata, Jio, Static, all these companies doing well.
01:27:51
Speaker
But the two-wheeler, three-wheeler charging network, there's only a couple of startups doing it. And all of them are doing their own thing today. So, Aether, Hero have combined to do their own thing. Ola is doing their own thing. We are kind of doing our own thing. And yeah, it's a little bit broken. But I see that consolidating hopefully in the next two years.
01:28:08
Speaker
It's just mainly a question of OEMs talking to each other though. So, it's not going to be easy. The connector war is like, say... ah Apple's lightning connector versus USB-C, something like that. like like the Yeah, but it's it's so much worse because there's like seven people in this and think none of them are actually as strong as Apple.
01:28:27
Speaker
So it's more like seven Samsungs and all of them are fighting with seven different USB versions. And so, yeah, it's going to be a much harder problem to solve. Like Apple, it's just like, okay, the EU mandated it, so they pushed them. And so now Apple had to change. So if they had not mandated, they would never have changed.
01:28:42
Speaker
um so And then they really really realized that our laptops are also charging the same connector as phone. ah It just makes sense for us also to change the connector because now all our devices can basically use USB-C.
01:28:55
Speaker
That really doesn't play out in the vehicle world as such because it's not like even if I have a car and bike, they'll use the same connector. So most likely I'll have two standards there. Now all the OEMs have their own opinions. So now they'll have their own war there.
01:29:09
Speaker
And yeah, then somebody has to start charging also. So that problem hasn't even started solving for you. So Yeah, I'd see that being a blocker, but honestly, I don't see that… i I say that's an obstacle, but not a complete blocker because sales are still happening. People are still buying vehicles. It's just that the interoperability is not there and it just hurts the speed and the overall scale, but not… Yeah, it's not a blocker by any means.
01:29:35
Speaker
Yeah, it's like the early days of mobile phone. I remember buying my first phone, which was a Sony device. and Sony had its own charger, a Nokia charger wouldn't work for a Sony charger and all of these issues. No, absolutely. It's where we are today, i I'd say. But yeah, it's not even like the ah same because at least those problems could be globally solved also. Like two-wheelers and three-wheelers will just be our government's problem to solve.
01:29:59
Speaker
And for them to come up with a very clear mandate, which is then going to overpower OEMs in India is also not easy because all of them are lobbying pretty hard for their own ah kind of opinions. So... yeah There will be a cost of upgrading or replacing if the government… Yeah, and then which OEM will bear it? Like why should one OEM bear it over another?
01:30:17
Speaker
there are so many issues there. Aether and Hero have tried very hard to like convince a lot of the other OEMs to kind of switch to their standard. And they've actually in fact nationalized that also. So, it is action actually a standard.
01:30:30
Speaker
But nobody's really cared much even after that happened. So yeah, it's kind of sad. But ah yeah, we as a company have always felt like we today use the most common connector. It's actually one privatized Chinese company, which actually four five companies use.
01:30:44
Speaker
But tomorrow, it changes to Ather standard, we'll more than happily change to it. ah Today, most of our chargers have like bolt-on connectors. So you can actually replace and swap it out if required. Because we are ready for that problem to hopefully be solved one day. because What's the cost of the connector?
01:30:59
Speaker
Yeah, we bear it, I think, when it comes to that. if like What is the cost? um I'd say it's 14, 1500 rupees for the pair. It's not cheap. Negligible. Yeah, it's not cheap, but it's not like the largest amount. Yeah, yeah, yeah.
01:31:13
Speaker
And so, what is the CCS2? This is the charging technology in terms of how the current flows. What is it defined like? ah So it's basically like if you look at any car's connector, it has like multiple holes in it.
01:31:27
Speaker
So why those holes exist in the certain para way they do, what size each of them are, when you connect both of them, which ones talk first, then which one talks, then how does the power flow happen?
01:31:38
Speaker
What kind of authentication do you do? All of that is the CCS2. So combined charging system, ah number two, because it was just the second one. There is used to be CCS1 also. That basically is the whole standard. So it's essentially a protocol and a physical connection system for the entire vehicle.
01:31:54
Speaker
Okay. And what you're using is also CCS2, from the Chinese company which you mentioned. No, actually. So for our cars and for our bigger packs, yes. But for our vehicles that are small and if it's a low voltage, we actually use another connector which then moon mainly only goes in two wheelers.
01:32:12
Speaker
So there is no CCS2 equivalent for two wheelers and three wheelers because ah globally they just don't care for two wheelers, three wheelers because yeah cars and above are there focusing. They're in fact focusing on another system called MCS which is basically a mega charging system for like trucks and buses because obviously it's more lucrative there, I guess.
01:32:29
Speaker
Right, and and they need a lot faster speed of charging. So, okay, okay, interesting. And this Tesla's NACS, what was that about, like?
01:32:41
Speaker
So NACS is technically a CCS3, I call it that way because ah Tesla just being the kind of company they are, felt like they could just do that connector also better than whoever else was doing it.
01:32:53
Speaker
And technically they did end up doing it better because it's much smaller, it's a like lighter connector, it transmits more power than CCS2. Because CCS2 is a global like non-profit company and they're competing with Tesla now for some reason, so it's not fair.
01:33:06
Speaker
But now Tesla is pushing more people to start using NACS because Tesla has the biggest charging network in the US. Like all the other companies combined don't have a charging network as big as Tesla does. So it actually allows Tesla that kind of power to push like their connector down every OEM's throat. And like it makes every, yeah it makes all the sense for every OEM to switch because they get access to a convenient charging network, which then helps their customers.
01:33:32
Speaker
That is not happening again in two, three wheelers. Like it's nobody's as big as Tesla in the this segment. And Yeah, it's going to be very difficult to standardize this. Okay, okay. A lot of people have thought. Okay, okay. Got it. Interesting.
01:33:46
Speaker
Okay, so now we've covered charger, we've covered battery. ah Do you also do solar yourself or you work with someone else? No, we work with someone. There's no
Mobility and Energy Service Models
01:33:53
Speaker
innovation there. There's no innovation there. It's a more of a buffer transferring system. But yeah, there's no innovation there from our side.
01:34:00
Speaker
Okay. Okay. Got it. Okay. So now let's understand the blanket model. ah You said you charge a rental and that rental is for the rider to have access to vehicle plus power.
01:34:13
Speaker
Right. oh How is it priced? And just help me understand that whole model. Yeah, so today we essentially are fronting this whole ecosystem which essentially revolves around fast charging.
01:34:24
Speaker
So we'll work with multiple vehicle OEMs. So we might give it like a small low speed vehicle, we might give like a big high speed vehicle, we might give it a scooter style vehicle, ah might give like a slightly big scooter, small scooter. So there's four or five variants from different companies.
01:34:38
Speaker
All of them essentially then become the base model for the same battery pack that we have that goes into all of them. So we essentially supply this battery pack to these companies. We essentially then go to the blinkers. Are the battery packs compatible? like or do you have to make a different form factor for each of these? The good thing about what we did was in the beginning when we started, we actually measured a multiple sco ah measured a lot of these scooters. We measured multiple of them, their dimensions, understood what they were.
01:35:05
Speaker
So sometimes we have to make modifications again in the output connectors, we might need like another harness to like just kind of deal with that. But in terms of size and form factor, we are actually compatible with most scooters, not all. so if I today, let's say, try to do athera roller, be completely different.
01:35:20
Speaker
But the ones we supply to pretty much all use similar sizes and standards today. So that's been the good thing today. We can actually supply the same battery pack for multiple companies. And that's actually happening. So we produce one particular pack. ah We call it Zenpack, which is a 2.2 kilowatt hour.
01:35:35
Speaker
And we supply that, like ah more than a thousand of them to multiple OEMs today, every month. So yeah once this is input, the vehicle along with the battery then gets shipped, let's say to a Blinkit Darkstore. So 40 or 50 of them will go for 50 riders.
01:35:50
Speaker
In parallel, we are also now going to that particular dark store and working with the dark store owner to set up solar and battery and set up, let's say five or six fast chargers there. Ride outside or inside or under the dark store, like in the basement or in the parking lot outside.
01:36:04
Speaker
And by the time the vehicles arrive, now you have this whole ecosystem complete. So then we give a rider access. They have an app to view all this. The dark store owners have an app to view all this. The fleet operator has an app to view all this.
01:36:15
Speaker
And every month they're essentially paying us a flat rental, which again, based on the vehicle varies anywhere around 5000 rupees a month, basically to give access to more than 2000 kilometers of usage while fast charging around 30 minutes a day, basically. So a rider comes up to a charging point. They essentially use that a couple of times a day.
01:36:35
Speaker
get almost 120 kilometers of range, basically using that. And then the interesting thing is they're actually charging it only when basically they're picking up deliveries or they're taking a downtime for some kind of food or some kind of idling.
01:36:49
Speaker
They're never actually going somewhere to charge. So the actual downtime is zero for us now. They're never going to a station. They're never going out of their way. This model is basically what we're pushing to dark stores and restaurants for that matter, because we see a lot of collection of these vehicles happening around these.
01:37:07
Speaker
So it becomes all the more obvious for us to then basically set up all this there. And this basically helps the end user a lot. Like, so you might have a Blinkit or a Big Basket because driver retention is also much better for them. All the drivers are always coming back. They have a very clear understanding. They're not like just going off to another service and working there.
01:37:24
Speaker
They're basically all their ah time is basically like to the minute, right? Like there is not one minute of downtime here. And yeah, just overall as an ecosystem, they're getting very clear visibility on their electricity costs. So as an entire model, the overall costs of energy are actually now driving down, which invariably is actually the only thing which quick commerce can reduce.
01:37:49
Speaker
So yeah, we are actually like at that forefront of reducing their cost as a model essentially. Okay. um So the the stakeholders that you described here, dark store owner, a fleet owner, and then the rider.
01:38:05
Speaker
um I don't understand why a fleet owner exists in this. Aren't you in a way like a fleet owner? Like like you are procuring and providing the vehicles to the dark store, right?
01:38:16
Speaker
What is the role of the fleet owner? Well, in a lot of these… ah So, you're absolutely right. Like in a lot of the places where we go, we're directly in touch with riders. But a lot of, let's say, rider associations become fleet operators. Like so ah someone might have, let's say, 100 riders in their books.
01:38:33
Speaker
Management of those riders, bringing them, generating that demand, all of that is the fleet owner's job. So, they might also technically have their vehicles as their assets. Like maybe they wanted to purchase… Like some of these also just purchase and then pay the rental.
01:38:46
Speaker
But most of them are managing, let's say, hundreds of riders, which then, yeah, it's it's own task in a way. like Because, um yeah, it's not easy by any means. Most of them are moving from somewhere… These are more like staffing companies, in a way, like the way to understand them.
01:38:59
Speaker
ah they They are sourcing the gig workers and making sure the dark store has whatever. If they contracted for 50 gig workers, then there are 50 people showing up every day, taking care of absenteeism, all of that. Yeah.
01:39:11
Speaker
Yeah, absolutely. yeah Getting the most out of the utilized on the rider side is basically their responsibility then, yeah. So, providing the asset that work is a our job, yeah. And you don't want to get into this. It makes no sense for you to be managing gig workers.
01:39:24
Speaker
I don't think this is where our expertise like really lies. And I also don't think… There is really need to do it because the way I see it is, if you, let's say, have a 1 lakh riders in this ah country, like just as a number, there's at least 10 lakh or 20 lakh in the next few years. But if I had 1 lakh, let's say there's a thousand people operating 100 riders each.
01:39:47
Speaker
All we should do is find those thousand people that can then basically use our assets and then actually make a business out of these assets. like That really is our focus. We want to basically scale to all 20 lakh riders and then in fact get to 2 crore or two wheelers. How do we get to that number?
01:40:03
Speaker
For us, it doesn't make as much sense. like So, let's only keep 2000 riders and let's extract all the revenue from those riders. We actually want the riders to earn more. We want fleet operators to earn more with the assets that basically last the longest amount of time for you to basically get that revenue out of them. so Our business will always be in improving those assets. Like our entire company is always focused how do i make better batteries, how to make better chargers, how to make the chargers easier to install, how to make better BSS, how to make this ecosystem faster, how to make the software better, how to provide more data, better visibility, better financing through so data.
01:40:37
Speaker
That's the focus. Okay. Okay. So ah when you're providing these, say, 50 vehicles to a dark store, ah you're procuring them or you are... Just facilitating it through a financing partner on whose books they apply.
01:40:53
Speaker
It's the second. We're actually facilitating it. Today, we have nothing on our books. ah We are completely asset-light. We actually like sell off the batteries. Then somebody else is actually managing it. The fleet operator pays revenue through us. And then we essentially it's a pass-through for us.
01:41:07
Speaker
that EMI. But yeah, we essentially paid off to the NVFC, but we aren't really liable for it essentially by any means. Because again, like I feel like there's enough people to be able to do the operations out of an asset if the asset does well.
01:41:22
Speaker
And that has really been the problem here. Like the reason a lot of people have had to basically do assets on their own books and scale that way either the market is just too nascent, like you nobody was ready to do it. So we had to do it.
01:41:33
Speaker
But today, that's not the case. Like most people understand EVs and if you can guarantee and actually prove that there's a certain amount of reliability and total cost ownership, more people are able to like then keep their assets on their books and kind of finance it. But yeah, our role to then actually allow this to operate and then giving that service like to basically make sure, you know, it's actually scaling is part of it.
01:41:54
Speaker
Today, is that's our job. The partner who's got the assets on his book, this is what, like an NBFC typically? Yeah, usually an NBFC. Okay. So they buy the asset. It's on their books. and But you said you're not liable for the EMI. Typically, an NBFC wants... It's like a hypothecation model, right? Where the the person who's using the vehicle is on the hook to pay an EMI every month. Otherwise, the vehicle is repossessed. So how how did you work out a different arrangement?
01:42:25
Speaker
So we are actually the third part. So one of them is us, but we aren't really liable for it only because the third party who's liable for this is usually either the OEM itself who's providing the vehicle or the fleet operator or the dark store owner or the third person who's essentially operating this model.
01:42:42
Speaker
Now, in almost all those cases, that's never us. We are actually trying to use the EV OEMs to basically use that or a mobility company or some kind of financing company who then basically then gives us in an operating lease.
01:42:54
Speaker
We aren't looking for entities who are looking for, let's say, like somebody who's like putting in a like bank account every month. That isn't the model because we are providing the reliability and the visibility of how this asset works.
01:43:05
Speaker
So it's yeah, basically, that's the model. Okay, so so they're like a fixed income product for the NBFC. They invest one lakh in an EV and they get back a certain and guaranteed return through the partner that actually is using this vehicle, called either the dark store owner or the fleet owner, or one of these.
01:43:23
Speaker
Okay, got it. um Okay, so... And ah the but the cost of battery also is instantly given to you. So from your cash flow perspective, there is like like your cash flows are not getting stuck anywhere. As soon as you sign up a client, you get the upfront payment for the battery. And on an ongoing basis, you earn for the energy because you're ah you have some margin. So like you said, 2000 kilometers ah of... So essentially, you're offering mobility as a service in a way. So 2000 kilometers of mobility in a month, you're promising to the dark store ah ah for one rider. And you charge... How much do charge for that?
01:44:04
Speaker
Just as an example. Anywhere between like two to two and a half rupees per kilometer based on the use case. But that's also significantly coming down in the next few months now for us as we scale. Okay. So let's say 5,000 rupees you're earning for 2,000 kilometers of mobility that you're providing.
01:44:21
Speaker
What is the economics of this? Out of this 5,000, how much is going for the yeah EMI of that asset? How much is going for energy consumption? And there would be some ah ah cost of the charger, et cetera, that you're providing, like some more fixed investment that you've done upfront, which you also need to amortize.
01:44:38
Speaker
How does that work out? So all the if I take like a 5,000 split, almost 50% of that is usually the vehicle and the battery asset. Another 20% is basically the charger and all the costs associated with it. So like setting it up with the electricity cost for it, all of that.
01:44:53
Speaker
And then everything else is basically service and downtime. So like the actual cost of the manpower involved in servicing this product, ah some of this like basically like the software services that operate, the IoT service, all of that is a little bit of it.
01:45:07
Speaker
But yeah, it's usually like a 50% split for those assets and then the other 50 for all everything else. yeah What's your margin in this? It's ah today actually already touching double digits. We are actually scaling. ah Today, we are just pretty positive on this one, which we are one of the only companies to be.
01:45:24
Speaker
But we should be above 20 very soon now for this. well okay Wow. Okay. So 50% goes to the owner of asset. Another 30% is all the other cost, the one-time investment for charger and the electricity cost on an ongoing, that OPEX, all of that is there.
01:45:41
Speaker
And the remaining 20% is coming to you as your margin. Yeah, absolutely. yeah So today, ah OPEX for us is pretty much, it's really nothing because there's no people involved in the charging. It's usually one or two people are involved for service in the region.
01:45:55
Speaker
like So we're going to go and just kind of keep check on ah some of these assets. But yeah, that's pretty much it. It's the the rental for the area and all is kind of taken care of. The assets are very affordable. In fact, maybe we're paying less than 100 rupees per asset per rider per month, ah which is, yeah, for the real key here.
01:46:14
Speaker
Okay. Your operating expenses are that level. Okay. Got it. Okay. um yeah Isn't there a mismatch of incentives issue that you face because the rider may mistreat the vehicle? Because all of these parties are but like they're so unconnected with each other. I am paying for 2000 kilometers. I'm not paying for a vehicle.
01:46:41
Speaker
So I may not necessarily care about how I use the vehicle. um you know so So doesn't that lead to misuse? And ah like have you ah encountered these problems so far?
01:46:54
Speaker
No, absolutely. I think it's a big one. right like This is, in my mind, like the most abusive environment to operate. Because you are literally using this above 100 kilometers every day and using it for a commercial purpose and using it just not for yourself, essentially, right? Like, this isn't your asset. So, like, you'll go through every... You're not paying for the asset. You're paying for 2,000 kilometers. Your asset is completely different. You know, you're not and at all... Like, like the you're not even thinking of, I'm paying for a vehicle. Like, I'm paying for 2,000 kilometers. so
01:47:25
Speaker
No, so I think there's only really, like, two things to do here, right? One is... every part of this has just to be so robust that it basically handles anything. Now that is obviously a design and engineering engineering challenge that and that's why we take the vehicles we take, right? Like we work with Kinetics, eLUNA which is the one of the bigger vehicles we work with because it's specifically designed for this application. It's like a no frills vehicle, it's literally like a giant moped and very large wheels, ah no plastics, all of that becomes a much better proposition for this application for abuse basically yeah pretty much yeah it's just literally engineered for this application so that at least helps let's say 60 70 of these problems you might have had let's say if i was using like a very nice honda vehicle right but on the other hand the like second part of this is that even if let's say you put a vehicle like you're going to have issues
01:48:15
Speaker
And solving them and keeping them under a certain value has always been the focus for us. So like quick service, quick traceability, having certain standard parts which are easily diagnosable. And if there's actual abuse, which we can then actually catch, because most of this is in a completely ah regulated like IoT system.
01:48:33
Speaker
You see like surges in current, you see like any abusers happening. We do have systems where where we penalize the riders. We haven't really done it for that matter. but in the future in fact we are getting to the point where we will have a rider based financing also so every rider like based on how they use their vehicle will get a rider health score or a rider vehicle score which is taking into account pretty much everything like how they accelerated how they charged when they did it what they did and then start financing that accordingly so this is ah obviously something in the future but for evs specifically this makes a very big difference because
01:49:06
Speaker
Operating for the same rider in Chandigarh versus somewhere in the south versus somewhere the northeast, all of these will give different values and all of them will have different outcomes. So, for you to be able to finance them in a variable manner will be very key in the future.
01:49:20
Speaker
yeah How much do you think your leakage or revenue loss will be due to all of these abuses and all that? Like, will it be single digit percentage or… Yeah, I'd say most of the segment is accounting for a 90% uptime, like nothing more than that. like So 10% of this ah is always down in some way the other.
01:49:40
Speaker
So that cost is baked into this. But um yeah, the objective is to get that to 95-98% pretty quickly. I think that is a little bit of a dream. But ah ideally, even if you get it above 90, the economics make sense. Because of The assets are financed over like two, three years and the rate of interest are by no means very low.
01:49:58
Speaker
I'd say they're like double digit on the higher side sometimes. and they So yeah, it makes sense. Okay. So now ah Zip would be like a direct competitor for you, right? They also provide ah like ah mobility as a service ah to last mile logistics.
01:50:16
Speaker
Zip is also just a fleet operator, right? Like so Zip today uses Sun Mobility. Now, they've essentially used swapping as a system to scale. it There is no reason for them to not use fast charging. So when we're supplying to them, like our idea has always been that, okay, now technically maybe when we started, Zip was too big to supply it to.
01:50:32
Speaker
So we had to do some of this legwork to get this market started. But I want a scenario where hundreds of Zips exist and we supplied all of them.
Future Outlook and Entrepreneurial Insights
01:50:39
Speaker
That is really the focus here. Now to get to that, there is a go-to market where we need to prove out.
01:50:44
Speaker
We need to get these stakeholders to see that, okay, a regulated, proven out system like swapping over the last 10 years is now basically being disrupted by something. Now, how do we do that?
01:50:54
Speaker
we can't just today go up to Zip and just take it. So we'll have to do a pilot. We show what are 100,000 vehicles. We show this scale happen. And then personally feel today the focus that if I look for IES from today,
01:51:07
Speaker
More than 50% of the segment should be fast charging and all of that should be us. There will be some players across the whole 40% who do swapping and slow charging and whatnot. But even within this 50% we supply to, there'll be multiple fleets that are running today. So we don't really consider Zip as a competitor. Like in a rider deployment for us, they are basically fighting for riders.
01:51:28
Speaker
But we technically are competing with SunMobility to supply to Zip today. And that really is the focus here. interesting Interesting. So you don't care about competing with a Zip on, site say you're charging two and a half rupees per kilometer and Zip is charging two rupees per kilometer. You don't care about that because You're not in this to provide mobility as a service. That's not the end game. No, it's a technical product, to be honest. Yeah, like there is definitely a scenario where we want to be energy a service, right? But how do you do that? Like you the mobility is a big part of this. So somebody has to solve for it.
01:51:59
Speaker
We're working with fleets, but I also feel like the fleets and like when you work with OEMs, have a certain speed and a certain process to it. But we want to be doing 1,000 vehicles a month.
01:52:09
Speaker
So we need to scale ourselves also. And that's good. That's it. Very interesting. ah So do you see energy as a service revenue coming? So like mobility as a service has a clear metric of rupees per kilometer in which the pricing happens. ah Once you go beyond this stage, right now you're doing mobility as a service as a way to demonstrate that this works, build a case study, um attract other mobility as a service players to come and adopt your technology.
01:52:41
Speaker
um couple of years down the line when that has happened, what do you think is the pricing metric going to be? Is it going to be rupees per unit or is it going to be just price of setting up but ah like a complete battery energy system? or How do you think ah you're going to be pricing it?
01:53:00
Speaker
So I'd say there'll be the The ideal future for us, the way I see it is somebody buys a vehicle for 25-40,000 rupees and everything else is taken care of. Like you buy a vehicle basically for a very small amount of money and then you pay for the entire ecosystem over time.
01:53:17
Speaker
that' weird the The vehicle cost is low because there's no battery in it. You're not buying a battery. you yeah The battery instead of buying outright, you're buying it as a service. exactly Exactly, yeah.
01:53:27
Speaker
That is the most ideal scenario here. Now… I can't expect that to happen overnight. Like today, there is no way I can ever tell everybody, ah everybody stop selling vehicles or batteries and now everybody start buying this way.
01:53:38
Speaker
There is a process there and I think we are clearly on that path now. So now we've got riders convinced that fast charging is right. We're starting to OEMs convinced that it's right. We're starting to mobility as a service operators convinced this is right.
01:53:49
Speaker
When all three combine, this can start happening. And this is technically already starting right now, like as we speak. But today riders are so used to the concept of rental because it's such a dynamic market, right? Like this, the vehicles change every second. Like I've been in Bangalore six years now and every year, every, like I've seen the hubs have different colored vehicles every couple of years, right? There'll be some variant of green, then they'll become blue, then there'll be some other color and it'll keep happening. I think till this market stabilizes, that definitely is the case.
01:54:20
Speaker
And yeah, I think we're in the fag end of that stability because Over the last two years, consolidation is very heavy. ah You won't see that many companies raising that many rounds, even seed for that matter in this segment, because it is starting to narrow in on certain companies. And yeah, we believe that we can take that whole chunk of fast charging light mobility in that segment.
01:54:43
Speaker
ah ah What's the unit that the pricing is going to hinge around?
01:54:48
Speaker
I think it needs to come down to 1.5 rupees a kilometer. Like there is a 1 rupee per kilometer operating number here, but with all of the capex, everything combined needs to be around 1.5 rupees per kilometer. Like when I see the full ah like bandwidth of this entire model, it has to be competitive to ICE, like within 5% of the cost of ICE.
01:55:09
Speaker
And then it has to be, let's say, like be 1.5 with all the capex of charges, all your rentals, all your services combined. So, you're saying your pricing unit will be kilometers? vehicles, it usually is. Like there is obviously the other side of this for the energy cost itself. And that for that, we are targeting 4.5 to 5 rupees a unit long term.
01:55:29
Speaker
But the impact of that, especially in the segment we are operating today in quick commerce, is usually down to per kilometer, how much am I paying? because The quick commerce companies are calculating their delivery cost based on that. Right, right. That's the metric they care about. yeah So that determines that value. Okay, okay, okay.
01:55:47
Speaker
Okay, so like just to draw an analogy, yeah You have ah fuel at whatever, say, 100 rupees a liter. But ah typically, a quick commerce company, even if it's using ice, would not be calculating how many liters it's consuming because there would be somebody in the middle yeah i would be charging them a per kilometer rate. Four rupees a kilometer, that number. right go And they provide a vehicle and a rider and the fuel, all of that combined, and then they charge a per kilometer rate, which is how the logistics industry typically works. They convert per liter rate into a per kilometer rate for their clients.
01:56:21
Speaker
um So in in your case, you probably will not actually be the person who's converting to a per kilometer rate. ah You would be serving the companies which are doing this conversion to a per kilometer rate, but you're saying you would also price it at a per kilometer for your mobility as a service clients?
01:56:38
Speaker
Not necessarily. the The understanding for it is very clear, right? Like if a rider is, let's say, paying this much for the asset and if we're getting the electricity cost to this value, the per kilometer cost will only be a combination of both.
01:56:52
Speaker
So in my mind, per kilometer cost is a combination of all the capex involved plus all the opex involved. Now, except for the vehicle, capex everything else is in our control like the battery cost the charger cost the electricity cost the conversion between those units everything only the vehicle is a uh let's say like a variable here which would be 25 to 40 000 rupees or 20 like maybe 50 000 rupees without a battery and that basically impacts like 0.2.3 rupees per kilometer but everything else is actually in our control so when i am saying this as an idealistic model if you want to scale to 10 cities in india
01:57:27
Speaker
all of them should then get to that same value for all those fleet operators. Because if it doesn't, then none of them should trust me. None of them need to be using, they're only using the solution because they know that they can hit that value, which will then allow them the reliability of hitting a certain value in their businesses of running fleets.
01:57:45
Speaker
That really is from here. Okay. Okay. Interesting. So if you were pricing it at a per unit for the fleet operator, the mobility as a service provider, they would still have business risk of that.
01:57:57
Speaker
ah What if the number of units that I'm consuming is going up, ah but my kilometers is staying constant. and so So you are eliminating that risk for them. And you're saying you are charging your customers per kilometer. I will also charge you per kilometer. So there is zero risk.
01:58:10
Speaker
I just think it's better to do it because like most people, like so not everybody is like some engineer. It's kilowatt hours and all this. like Not everybody likes getting into. um but like It's the actual meter.
01:58:22
Speaker
There's a scalable way of doing it. Okay. Very interesting. um You're able to charge the kilometers, you're able to track the kilometers just because of your battery being there in the vehicle?
01:58:34
Speaker
Yeah, down to the meter for that matter. Because today it has ah IoT, it has GPS, it has an entire count for how much energy it's consuming. So yeah, we have multiple ways to calculate that based on distance and based on energy.
01:58:46
Speaker
And then we combine both and then actually give a very accurate reading for it. ah Okay, so my last question to you, Shaitanshu. um you know What's your advice for entrepreneurs? And you know you've been ah you're doing something like deep tech, and deep tech is like a really hard sector to work in. Everything from raising funds to ah finding PMF, all of these are extremely hard obstacles to overcome. So you know what's your advice for other people who aspire to be deep tech founders?
01:59:16
Speaker
Right, yeah, it's a big one, right? Because ah all of the it's the confluence of the hardest things in the world, right? Because you're genuinely doing something which is unpredictable. You don't know if the research will play out. Forget the market fit.
01:59:28
Speaker
You don't even know if it clear research, then go to product and then go in that fit. So... I think the one big thing I've seen for that's working for Raoul and me is that we're always super curious and we're always like doing something. like ah So there's never really ah like a moment that we're not really like thinking about batteries or thinking about the scale or really just… is this This is not a trend for us, right? like This has been everything for us. like we've been like This has been yeah have piling up for the last decade or so. So I think a lot of people think that deep tech happens overnight or it takes like a year or two. But yeah, just to get to that point takes so much time, so much resilience. so
02:00:05
Speaker
the only big thing i have for people is that just yes stick with it it takes uh years and it takes hundreds of people or hundreds of hours hundreds of like just everything to really get this right right like and even when that happens it's a miracle because there's so many things that you have to get right for this to work so I feel like there should just be more and more people doing this. A lot of risk being put online. ah Yeah, just go at it. like I feel like nothing this will be easy ever. i don't think it's even today for us is like no form of success has actually come. like This is like the the stage one of the zero stage, right? For us, like the stage we're at right now. so
02:00:43
Speaker
I don't see us like working any lesser or working any slower for the next like few years to come. But that is just what this takes. Like, I don't think we're ever thinking that, oh, I just like, should build this for a couple years and just get out of this.
02:00:55
Speaker
It'll not work out. It'll not work out for us. We're destined to fail if that is our attitude. Like we have been seeing this for years. I've been trying to find someone like Rahul for the last decade and actually ah meeting him, like changed my whole perspective of this and allowed me to have a bond, which has allowed this to scale. Right. so Yeah, keep be curious. Keep searching for somebody. Keep searching with people who you like interacting with.
02:01:18
Speaker
And yeah, if you have that slightest thing inside you that you want to just go out and do this, don't hold yourself back. like There will be a hundred things stopping you from doing this. But the best time is just now. Yeah.
02:01:32
Speaker
If you feel like that you're there and you want to just put the next two, three years of your life into actually making something happen. Yeah, just go at it. Don't listen to anybody after that. So as and are there...
02:01:44
Speaker
Are there de-risking strategies? you know For example, Log9 made a bet on LTO and that bet kind of like worked out very badly for them. You could have also made a wrong bet. Is there some de-risking approach you took which kind of saved you from wrong bets? Or is it the nature of deep tech startups that some of them will fail and it's okay? you I mean, that's how it is.
02:02:08
Speaker
I don't think there is something specific we did to de-risk what like they did. right But one thing is that our understanding of this sector and this tech is so deep that even before they had executed what they were doing, we kind of knew what that entails.
02:02:26
Speaker
Like the understanding of what that chemistry allows, the understanding of what that tech actually allows, how that will play out in the market, how it will affect their finances. How will your business evolve?
02:02:37
Speaker
What kind of money you'll have to raise based on that? These are certain questions we asked ourselves to basically understand that better. And that really just comes from our just focus on this. It's not just tech understanding. there it's It's also like commercial understanding. Well, you could see through the finance problem here. Essentially, it was a financing problem which you... Yeah, this is not a research project for us, right? Like this is... Yeah, this has to last 100 years. This has to set up as like a foundation for years to come. So...
02:03:04
Speaker
So, thinking one, two, five and then 10 years and then building it while you're doing it is very important. I remember ah one of my previous like bosses had told me this, like, running a startup is like flying a plane while building it.
02:03:18
Speaker
And there is really no better way to say this. Like, you don't know when it'll crash, you don't know what's going to happen. And yeah, we just keep building it anyway. And just keep going. How did you develop the… finance instinct.
02:03:30
Speaker
like Like you have a finance instinct because of which you saw that the LTO battery is not the way to go. How did you develop that? Like that commercial understanding of technology. but You're not a pure technologist, but you are also, you're you're like an applied technologist. You can see within the marketplace what will work.
02:03:47
Speaker
I think again, this just comes from like the the depth of just looking through other companies, what has worked for others. Like The simple answer to this is that there's nothing much other than this we do. Like we just focus on this and that's all we do, right? Like I don't know anything about like a hundred other things that happen in the world.
02:04:06
Speaker
I might not even know what like the news that has happening today, or to be honest. ah And that really is what it takes. Like that's what I'm trying to get to. Like you're completely obsessed with everything else. Yeah. And just ah today, i like we know like how many vehicles who sold like in a monthly basis, who is number one to eight Normal people don't know all this like and they're not supposed to know all this either. so But within your sector, if you're going after, you better know this. And like you better know every single is like ah head, like every what they're connected to.
02:04:37
Speaker
And I think the big picture, at least for a founder and like ah for someone in my position is to be able to like literally visualize a company as a picture in a way. like To be able to like see all those nets like forming, all those connections forming, which needs more focus when.
02:04:53
Speaker
Yeah, it really just comes down to that. And again, we're all so still learning this. But the, again, absolute just focus on making this happen and making only this happen and nothing else happen is why we feel like there is a slight chance of success then.
02:05:08
Speaker
And that's all you can like try for. It's just slight. Like the probability might be a little bit higher, but it's never going to be one. yeah I'm going to slip in one more question because of your obsession, Shri. So if I'm looking at personal use EV two-wheeler, which one would you recommend? And if I'm looking at commercial use two-wheeler EV, which one would you recommend?
02:05:27
Speaker
ah Interesting. So personally, I think I would say Atherista. Rahul's father uses it. He's had it for a while. like ah Yeah, and Aether as a company, I just like i like like and for multiple reasons.
02:05:40
Speaker
Commercial, I definitely say eLuna with Emos battery pack. I think you should definitely take that one. It's a pretty strong choice. But yeah, personally, i would recommend it because i don't think people want to use eLuna.
02:05:51
Speaker
And ah one more question. So should I charge my phone on fast charger or slow charger? It really actually depends on what phone. so I always use a fast charger and I regret it little bit. My battery has degraded a lot.
02:06:05
Speaker
Phones are tricky. like Different phones have different abilities. like I know Oppo is better charging than others. ah Vivo is a little bit. So, yeah, I think it depends. If you use your phone like for one year every year, then you please fast charge it. No one cares. ah But if you're using it for four years, if you like want to extract everything out of your phone, then yeah, you should slow charge. I think phones have got to the point where most people are changing every two years.
02:06:26
Speaker
So after one year, everybody's anyway carrying around an extra battery or a charger all the time. So yeah, whether we like it or not, we're actually fast charging most of the time. now And that impact of slow charging will show up over months, which then you won't really see as you use it. So yeah.
02:06:40
Speaker
OK. And if I'm buying a power bank, ah there are different technologies of power banks, right? Which is the best technology to buy? ah Sorry, just maybe to elaborate like what your examples are. Like a power bank, you know, like for for the phone?
02:06:54
Speaker
Oh, so whether they connect or they go on the back that way? no no, no. Like there is like there's lipo also and there's lithium-ion also. like So actually that's basically the chemistries for cells. Like lipo is pretty good.
02:07:04
Speaker
ah Lipo is like LFP variant. So yeah, that works pretty well. Lithium polymer. Okay. Okay. Awesome. There's a more newer ones here. Yeah. Thank you so much for your time, Shaitanthu. It was a good ah actually high information kind of a conversation, but I truly enjoyed it.
02:07:20
Speaker
ah Please. Thank you so much. Yeah.