While government incentives played a key part in the business plans of most EV start-ups, Bengaluru-based Altigreen strove to ensure that its three-wheelers make sense even without incentives, a strategy that is paying off now.
07 Sep 2024 | 8583 Views | By Amit Vijay M
In the heart of Bengaluru, India's tech capital, a revolution is quietly unfolding. Amidst the cacophony of startups vying for attention in the burgeoning electric vehicle (EV) market, one company is standing out with its unique approach and unwavering commitment to sustainable mobility.
Altigreen Propulsion Labs, a homegrown EV ...
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In the heart of Bengaluru, India's tech capital, a revolution is quietly unfolding. Amidst the cacophony of startups vying for attention in the burgeoning electric vehicle (EV) market, one company is standing out with its unique approach and unwavering commitment to sustainable mobility.
Altigreen Propulsion Labs, a homegrown EV startup, is not just surviving but thriving in the competitive world of electric three-wheelers, proving that with the right mix of innovation, adaptability, and foresight, it's possible to turn challenges into opportunities.
The Electric Surge and Its Aftermath
India's electric three-wheeler industry has witnessed an unprecedented boom in recent years. In FY24, sales skyrocketed to nearly 632,000 units, marking a staggering 57% year-over-year increase. This surge reflects a broader shift towards electric mobility in a country grappling with air pollution and a hefty oil import bill. However, this success story has a less glamorous side that many startups are struggling to navigate.
"The industry has gone through a very tough time, with the big players soaking in the losses, but the smaller players almost stand to get wiped out," confirms the head of one of India's largest automotive firms. The landscape has been particularly challenging for EV startups, many of which built their business models around generous government subsidies. When these subsidies were slashed — dropping from around Rs 95,000 per vehicle to nearly half that amount — many found their balance sheets bleeding red.
Altigreen's Countercurrent Strategy
Amidst this turbulence, Altigreen has managed to chart a different course. Dr Amitabh Saran, CEO and Co-founder of Altigreen, reveals their bold ambition: "Triple its sales from Rs 100 crore to Rs 290 crore by FY25." But what's the secret behind their success when so many others are floundering?
The company has based its strategy on adaptability and a laser focus on self-sustainability. Saran explains: "We took the hard call that businesses must be self-sustaining and revenue-generating and not depend on the government for support. Yes, even at the current levels, the subsidies are there and they are welcome, but we are a business and ready to stand on our own two feet."
This strategy has paid off handsomely. Altigreen has posted a positive EBITDA margin of over 10% in fiscal year 2024, a remarkable turnaround from the negative 3% margin in the previous year. The company achieved this through a series of strategic moves, including corporate restructuring, direct purchase agreements with global suppliers, and sharp cost-cutting measures.
A senior company executive, speaking on condition of anonymity, elaborated on these efforts: "Altigreen has gone through a series of corporate overhaul actions by pruning its staff, getting into direct purchase agreements with global material suppliers, and a sharp downsizing on avoidable costs. This has led to the firm improving its overall margins."
Crafting a Diverse Product Lineup
Altigreen's success isn't just about financial manoeuvring; it's also rooted in understanding the diverse Indian market. The company has crafted a product lineup as varied as India itself, catering to both urban and rural needs.
For city dwellers and e-commerce businesses, there's the long-range 'neEV', boasting a certified range of 150 km. Equipped with an 11 kWh battery and 8.25 kW peak power, it's designed for greater city usage and last-mile deliveries.
The 'Bhai' targets densely populated markets with shorter travel distances. With a range of 100 km and a smaller 9 kWh battery pack, it's perfect for transporting groceries, bakery items, and medicines. It even comes with an integrated rear camera and a 5-inch display screen for safe parking in crowded areas.
For rural India, there's the 'Rahi', designed for shared mobility between towns and villages. Saran emphasises the potential of this market: "This segment alone has a market size of 1.5 to 2 lakh vehicles sold per year, and the Altigreen 'Rahi' is the only vehicle with a driver+5 passenger combination." The Rahi also features foldable seats, allowing drivers to transport cargo when not carrying passengers, adding to its versatility.
Pushing the Boundaries of EV Technology
Altigreen isn't content with just meeting current market needs; they're actively pushing the boundaries of EV technology. The company has made significant strides in fast-charging capabilities, matching or overtaking competitors like Omega Seiki Mobility.
Their neEV TEZ variant is compatible with the expanding DC charging infrastructure in Delhi, offering en-route charging on the Bharat Network. But the real game-changer is their rapid charging port at E-pump setups, capable of charging a vehicle from 0% to 100% in just 15 minutes. This kind of innovation could be the key to wider EV adoption, especially in areas where charging infrastructure is still developing.
Global Ambitions and Funding
While Altigreen has found success in the Indian market, the company's ambitions extend far beyond national borders. The startup is currently in talks with new investors to raise more than USD 50 million, adding to the nearly USD 49 million it has already raised from notable investors like Mukesh Ambani's Reliance New Energy Solar, Accurant International, Xponentia Capital Partners, and others.
Saran outlines their expansion plans: "Any future funds raised from now onwards will be used to expand our products and further our expansion plans in Southeast Asia, particularly Thailand, Indonesia, and the Philippines, where there is a strong interest in our passenger and cargo variants."
This move into Southeast Asian markets could be a game-changer for Altigreen, allowing them to tap into new customer bases and potentially leapfrog competitors who are still focused solely on the domestic market. The company is also exploring new product categories like e-LCVs, further diversifying its portfolio and revenue streams.
Solar-Powered Innovation
In a unique and forward-thinking move, Altigreen is looking to partner with the Indian government's ambitious Solar2EV project. This collaboration aims to integrate rooftop-based solar applications through Altigreen dealerships, addressing two critical issues: reducing EV charging costs and alleviating the strain on weak rural grid infrastructure. Saran explains the potential impact: "By collaborating with the GoI, we hope to gain a share of the renewable energy pie and keep vehicles charged on the go by integrating solar-based EV charging to keep the vehicle running longer."
This initiative could be particularly transformative for EV adoption in Tier II and Tier III markets, where reliable grid power can be a significant challenge. It also aligns with India's broader goals of increasing renewable energy usage and reducing dependence on fossil fuels.
Navigating Future Challenges
Despite its current success, Altigreen isn't resting on its laurels. The company is keenly aware of the challenges that lie ahead, from increasing competition to potential shifts in government policy. To stay ahead of the curve, Altigreen is constantly innovating and refining its strategies.
One area of focus is upping its market share. Saran notes, "Penetration of EVs in the commercial space is currently close to 25%, with the firm having close to 12–14% market share." The company aims to grow this by 1-2 percentage points in the current year while fully utilising its 55,000-unit manufacturing facility in Malur.
Altigreen is also developing vehicles that can serve multiple purposes, such as transporting both cargo and school children. This versatility could be a key differentiator in a market where adaptability is crucial.
As the electric revolution charges forward in India, Dr Saran's vision for Altigreen extends beyond mere profitability. It's about creating sustainable transportation solutions, or as he puts it, "We are a business and ready to stand on our own two feet."
This feature was first published in Autocar Professional's August 15, 2024 issue.