To accelerate energy transition, commercial EVs need to deliver value: Euler Motors CEO

We launched our product in October, 2021. In the first year, we sold around 300 vehicles. In the second year, we sold 950 vehicles. This year, we are on target to sell between 3600-3800 vehicles, a full-fledged 4x growth from last year. We are looking to close somewhere around Rs 200 crore of revenue this year, from Rs 50 crore last year. The growth is evident. In terms of our market share in the L5 category, I think we’ve gone up to 14-15 per cent pan-India this year compared to 3 per cent last year.

Since heavy EV batteries reduce carrying payload capacity, will alternative fuels like green hydrogen be seen as a more viable option for cargo vehicles?

There is some truth to the statement that heaviness starts to impact performance once you start crossing the light commercial vehicle (LCV) segment. That’s where that truth starts to become much more prevalent. Once you cross that LCV boundary and you start to enter medium and heavy commercial vehicles, that’s the category for which I feel hydrogen will make sense.

The only question mark that I see in that statement is– as we are seeing newer technological advancements to increase energy density, like solid-state and lithium-air chemistries, batteries are going to become lighter and smaller. You will be able to package more energy in smaller batteries and your fast charging capabilities will also increase. As that continues to get pushed, your transition point between lithium-ion based technology versus hydrogen will get further pushed. For hydrogen, you also have to set up a lot of infrastructure like liquefied hydrogen compressors and refuelling stations. Maybe early variants of medium commercial vehicles can use hydrogen. But for LCVs, at least what Euler has been focussing on, we feel through and through that electric is going to be a good solution.

Can you describe the technologies Euler uses to improve battery longevity?

Battery health is impacted by both temperature and the depth of discharge on a daily basis. To avoid the problem of early battery loss, we have developed and patented a liquid-cooling technology for battery packs. During summers, we know that batteries tend to heat up and because of that we have some liquid going in at a lower temperature to absorb the heat of the battery to cool it. When the liquid comes out, we have a device that lowers the temperature and again that cool liquid circulates back to take away the heat. The circulation keeps on happening. By cooling the battery, you basically slow down lithium-plating which is a process of lithium accumulation on the anode material. Because of this, the ability of the battery cell to carry the charge degrades. Because of degradation, your battery ends up losing capacity over a period of time. The effect of lithium-plating gets aggravated if the temperature is higher.

Unlike passenger vehicles, where people do a full charge typically on weekends and use it through the week, commercial vehicles are charged and discharged on a daily basis. If you charge the battery frequently, don’t do cooling, and don’t have a higher battery capacity, then you end up losing battery life much faster. Euler has a higher battery capacity. We also keep higher reserves in the battery itself– between 10-15 per cent that you can’t use even if your battery is fully discharged. You need to keep some energy left in the battery so that the depth of discharge does not create problems in future.

How do you see the government’s FAME subsidy playing out in the next few years?

FAME II came in the market at the right time. It pushed the industry and the ecosystem in the right direction. If the subsidy continues for the next 3-5 years, India will have a lot to show for it. In my view, 20 to 30 per cent of the market will get electrified in the next 3-4 years. What will also happen is that as the volumes increase, component prices will also fall. If you look at the battery and semiconductor prices, some of that has also been falling over the last decade. We believe that the prices will fall further. Therefore, even if the subsidy tapers off and goes away, the net impact will not be felt by the ecosystem and the customers. The subsidy doesn’t have to be at the same level as now. If it is, it will obviously push the ecosystem a lot faster. But tapering it off slowly, which is what I have read with regards to FAME III, is a brilliant thought process as everyone in the ecosystem will be able to acknowledge, accept, react, and execute all of their strategies.

What are some of the challenges Euler has faced in financing sales in tier-2 and tier-3 cities?

When you think about vehicle ownership, there are two equations– total cost of ownership (TCO) and total cost of acquisition (TCA). TCO is often talked about. TCA is where the challenge comes in. You get around 10 to 15 per cent down payment options in tier one markets. In tier-3 markets, it goes up to 20 per cent. Thus, the funnel of customers that can enter reduces. Even though the total cost of ownership makes a lot of sense, the total cost of acquisition doesn’t allow them to enter the funnel. We have been thinking about different options for how we can enable that. FAME is one such solution as it is also an indication to the market that this is an area which is of vital importance. Financiers and other partners in the ecosystem will also step in and I hope they put in 10 to 15 per cent down payment options in those markets as well.

Can you describe the degree of software integration in Euler’s products and services?

Through our software today, we are able to help our dealers understand how a customer is using their Euler three-wheeler. Ten years back, if there was a problem with a vehicle, customers would take to social media or other conventional means to fix it. Today, there is a data layer through which brands can know what is happening to a vehicle that is going in some remote part of India. If there is a vehicle that can have potential product or service related issues, we would like to tell the customer about it earlier so that they can save their day of revenue. We try to figure out the problem and schedule repairs in a way that their daily operation is not interrupted. Otherwise, they would have lost that day’s revenue. For them, this asset is not for luxury or pleasure, it generates revenue. Moreover, all vehicle parts in our three-wheelers are talking amongst each other on a private data network. For instance, when you plug the vehicle to a fast charging point of any other operator, it communicates with it regarding the voltage it is getting, the battery temperature, the charging speed, so that it can have some control over the process.