It took him six years to create a saleable, environment-friendly electric car, and almost 10 more years to make it the world’s single-largest selling model. Today, it’s probably the world’s largest selling electric car with little over 3,500 units sold in the last one decade. Chetan Maini, a technocrat entrepreneur, however, did not break even.
His company invested more than $50 million (around Rs 225 crore) to manufacture EVs, but saw limited returns due to the high cost of manufacturing. Maini, thus, could not lend Reva – India’s first electric car – a touch of mass appeal. Many factors worked against him. India, for one, does not have enough charging stations. Besides, his company did not have enough money to keep on pushing the product merely on its environment-friendly features.
On May 26, when Maini sold his company Reva Electric Car Co to Mahindra & Mahindra – India’s largest sport utility vehicle maker – his hopes were raised once again. Reva may soon get a new brand logo which will also have the name of Mahindra. The new name is yet to be worked upon by both M&M and Reva. M&M is expected to continue with the name Reva till the exercise is over.
“We are very passionate about the brand. We will be having discussion in detail about how to change the brand image of the car. It’s hard to comment right now. The Mahindra name will give the brand more security. It’s a good combination from a consumer perspective. New business technology will come with the large business house coming in to the picture. We will leverage their brand strength to drive future growth for the car,” explains Maini.
“It has taken 15 years for me to build this company and I can finally see a nurturing of EV space, a coming together of opportunity with government support and consumer interest. In Frankfurt, I saw 42 electric vehicles being shown, I knew we had to move to a larger growth path and needed a strategic tie-up to take us there,” says Maini.
While the Maini family received a good deal for their product, M&M has got hold of a ready product and access to alternate technology. With a fresh equity infusion of Rs 45 crore to begin with, M&M is readying a big roadmap to expand the market for Reva. With M&M’s muscle power and distribution network, Maini hopes his baby Reva will grow bigger. M&M has the Bijlee three-wheeler in the hybrid space and Maxximo, a light commercial vehicle. Now it has Reva too.
Pawan Goenka, chairman, Mahindra Reva Electric Car Co Ltd and President (automotive & farm equipment sectors), M&M says: “We will continue to pump in more money as and when required to build the brand image of the car so as to increase the sales. We are targeting 50,000 unit sales by 2020 in India.” Customers, too, can expect the retail price of the electric car to come down.
But will changing the brand name of Reva help? Brand strategists feel it might be a good idea for the M&M to retain the ‘Reva’ name for its cars. “Reva is a very good name. It has been around the market for many years now and carries the memorable image as India’s first electric vehicle. It is also associated with evangelical work it has done in the electric vehicle space,” opines Harish Bijoor, CEO, Harish Bijoor Consults. Bijoor adds that in any acquisition, the possibility of revamping the original brand name over a period of time always exists as it enables the acquirer to erase the mother equity and build on its ownership.
Meanwhile, Maini has statistics on his side. PricewaterhouseCoopers (PWC) estimates that global sales of electric vehicles for all companies will be about 500,000 in 2013. In addition to Nissan, General Motors Co., Chrysler Group LLC, Mitsubishi Motors Corp., Ford Motor Co., BMW AG, Toyota Motor Corp. and Daimler AG all plan to be selling electrics by then.