Under the model, the electric carmaker would provide electric car production and marketing knowhow while the capital would be raised by its partner in that country.
Bangalore-based Reva Electric Car has initiated talks with the several state governments in Asia, Europe and US to produce electric vehicles in the overseas market through its franchise manufacturing model.
Under the model, the electric carmaker would provide electric car production and marketing knowhow while the capital would be raised by its partner in that country.
“It is not just the individual companies and private equities firms that are interested in being our franchise partners for electric cars but even governments in different part of the world find our model very attractive. We are engaged in talks with them (governments),” R Chandramouli, president - sales and marketing - Reva Electric Car Company Pvt Ltd told DNA.
Simultaneously, the company is working with Italian private-equity firm Cape-Natixis to make an offer for Fiat’s plant in Sicily, which could be used for producing electric cars.
It has also entered into an agreement with Long Island-based Bannon Automotive to manufacture the three-door hatchback Reva NXR electric car in Central New York, which would be launched in the North American market this year.
Chandramouli said the company’s business model was attractive to its partner because it involved very low investment and could achieve earlier breakeven compared to other car production models.
“Under our model, a company can achieve breakeven once it reaches the volume of 10,000 cars per year. For others, it goes up to 10,000 cars per month to reach the breakeven point because of their very high capital investment,” said Chadramouli.
He said this is possible because of the elimination of many processes and outsourcing of component manufacture.
“For instance, we do not have any painting shed. We get pre-coloured sheets so there is no need for painting. That process gets eliminated. Also, since we outsource component manufacture and only assemble them at our plant, we bring down the cost drastically,” the Reva executive said. Reva is expecting its volumes to surge once it brings its Reva NXR and NXG into market.
Its new generation electric car plant in Bangalore will be commissioned by the end of this year. It will have annual capacity of 30,000 units.
“The NXR model, which will begin delivery in 2011, will push up the volume for us. After that we will launch the NXG and then onwards we will launch one variant and one model every year,” said Chandramouli.
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