Industrial Automation Magazine India

Our vision is end-to-end solution in the whole value chain of EVs

Published on : Thursday 07-04-2022

Maxson Lewis, CEO and MD, Magenta.

Magenta was launched in 2017. Five years later, how do you see the achievements vis-à-vis the evolution of the EV ecosystem in the country?
India is undergoing a very subtle revolution in Energy and Transportation space in the form of generating clean energy and decarbonising transportation. Since its inception in 2017, Magenta has always been contributing and pioneering in various aspects of this revolution. 
With our unique projects, we pioneered clean based EV charging and set up many “India’s firsts”. Few of our accomplishments since our inception have been, we setup ‘India’s first solar based EV charging station’ in June 2018, ‘India’s first EV enabled and electrified highway’ in July 2018, ‘India’s first EV tariff billing meter’ in September 2018, ‘India’s first residential complex with EV charging facility’ in October 2018. 

We focused on solving some of the barriers for EV adoption basis which we now have 3 business verticals, viz.,
1. Magenta EVSE where we design and develop EV chargers for Indian usage and climatic conditions

2. ChargeGrid EV charging network across India solving EV charging complexities at residential societies, corporates, highways and for Fleets, and

3. EVET, which is our youngest vertical for deployment of electric fleet.

These three business verticals connected by our Informatics Tech platform work seamlessly to solve for ourselves and for our clients.

In this evolution of the EV ecosystem and of Magenta, we had partners like Hindustan Petroleum (HPCL) and Shell India who seed funded us.

At this time, we are steadily growing in our mission of Empowering the transition to Clean Mobility and now moving from Pioneers to Leaders in this area.

What are the main obstacles in the adoption of EVs on a wider scale, especially in personal transportation space?

While there are a few challenges in wider adoption of electric vehicles, one of the major obstacles from a broader perspective still continues to be what is famously termed as the ‘Range Anxiety’, a favourite and equivalent phrase on every Indian’s lips, ‘Kitna deti hai’.
This anxiety is aggravated by another form of anxiety termed as ‘Charging Anxiety’, i.e., the lack of charging infrastructure. 

In India, the ratio between EVs sold to public chargers installed continues to be bleak. We had about 900 public chargers installed for 1.5 lakh electric vehicles sold last year. While government has an ambitious and encouraging target of installing public charging stations at every 9 sq.km. These need to be affordable, accessible and most importantly, reliable charging stations to the general public.

In addition to the above challenges, there also is a higher upfront cost of owning an electric vehicle. An equivalent variant of the ICE vehicle would be cheaper than its EV variant by almost 30% and this thought plays out in a person’s decision to purchase an electric vehicle. Hence the transition of ICE to EV in the 4-wheeler personal space will be slowest. Hence it is important to see the EV growth in other segments – 2W and 3W, especially in the commercial segment.

Lack of visibility regarding resale value, battery degradation, warranty and a few recent instances of fire continue to plague the wider adoption of EVs on a larger scale.

The charging infrastructure appears to be growing, but is space proving to be the spoiler, with even housing societies reluctant to create the facilities?
I wouldn’t exactly say that the EV charging infrastructure space has been a ‘spoiler’, since there have been a lot of recent tailwinds driving the growth of the whole EV ecosystem.

For instance, EV sales have grown at almost 200% y-o-y. This transformation from horizontal to vertical growth builds a CPO’s (Charge Point Operator) confidence on utilisation of his assets and they see returns on their investment albeit not immediate but from a long-term perspective.

With OMCs (Oil Marketing Companies) such has IOCL, BPCL and HPCL announcing thousands of charging station installations across their fuelling outlets and highway units, this helps gain consumer’s confidence and results in swifter and larger adoption of electric vehicles and helps curb their ‘charging anxiety’ inhibitions.

PSUs (Public Sector Units) have shown aggressive intent and execution in installing public charging infrastructure with Ministry of Power setting an ambitious target of electrifying and installing EV charging infrastructure at every 9 square kilometres in mega cities.

There have been a few start-ups setting up charging stations and exploring viable business models resulting in a lot of innovations in this space.

These are only a few instances of tailwinds for growth in EV charging infrastructure space. However, as is the case with returns on any infrastructure related project, yield on EV charging stations setup and operations will take time to break even and be profitable.
Builders and architects, in all their new projects, designate and earmark exclusive parking spaces for electric vehicles. This has also been mandated by a few state governments under the MoHUA draft for Model Building Bye Laws. 

However, the lack of eagerness to create the facilities lies with older buildings with limited and congested parking facilities in their complexes. Their reluctance is also due to the electricity load limitations and high upgradation costs in case they were to create EV charging facilities at their respective buildings. Given that majority of the owners in a residential complex soon will drive electric vehicles and 80% of EV charging will happen at home or offices, sooner the better, housing committees work towards enabling EV charging at homes and residential societies. In fact, we have been doing very interesting EV charging partnerships with housing societies in Delhi NCR, Mumbai and Bengaluru. These models probably will define how EV charging gets adopted at homes.

The Electric Mobility Platform looks like an ideal addition. How do you propose to scale it up?

Magenta’s vision has always been to ‘Empower Electric Mobility’ and right from the beginning we were clear to provide an end-to-end solution in the whole value chain of electric vehicles and services related to it. In 2021, Magenta launched its mobility platform under the brand name EVET – an acronym for Electric Vehicles Enabled Transportation. Anything that gets produced needs movement, be it from farm or factory to distribution centres or direct to customers.

We believe that simply providing electric vehicles for transportation is never the solution clients would require. Hence, under the EV charging network arm of Magenta and brand ChargeGrid, we set up 24x7 operational charging stations for fleets near client warehouses, distributions centres and hubs. Moreover, we have now made the operations technologically intelligent, smart and automated keeping in mind each clients’ precise requirements and expectations. 

Electric vehicles bundled with charging stations and software technology is exactly the solution we provide to our customers with effortless operations management and monitoring.
Now with this template of end-to-end solution, we are all geared up to expand and scale up our services to neighbouring cities. Our scale-up plans include Mumbai, Hyderabad and Chennai to kick-start operations in respective quarters of FY23, with scale up in North-India and Tier-2 cities in the next year.

You are presently concentrating on goods transport. What about people carriers?
Here’s an interesting story about EVET. We initially started off with electric 4 wheelers and people’s movement for large MNCs and IT companies in Bengaluru in early 2021. 

Unfortunately, we then had the second wave and subsequent lockdown stretching the work-from-home for these companies. We used this time to develop the technology and software required to operate and manage this platform.

We were closely tracking the shopping trends and the cargo segment and surprisingly we were able to pivot quickly to 3-wheelers cargo and last mile delivery segment using electric fleet. We offered the same solutions – EV + Charging + Tech, to e-commerce and FMCG clients, ran trials for couple of weeks and the solution was quickly adopted by them thereby enabling these large logistics and delivery companies to easily transition a part of their fleet to electric mobility.

While our focus, at present, is on the delivery and cargo space and providing solutions related to the same. Soon as the businesses and large organisations open up offices, we may consider providing people’s transportation and related solutions to them as well.

As an end game, for these organisations who want to transition to electric, Magenta becomes the default one-stop-solution partner.

Is funding an issue with the expansion of facilities as well as realising the growth plans of the company – organic, inorganic or collaborative?
Well, in any scale-up program, across all industries, your fund size determines your expansion plans. Unlike other start-ups, we at Magenta, believe in building a sustainable, low-cash-burn business models focusing not only on Top-line but also on EBIDTAs. Our three business lines allow us cross fungibility. We have been working towards various innovative business models like drive-cum-owner models of owning assets, aggregator platform for attaching vehicles on our platform, selected franchisees for setting up charging stations with revenue sharing and net returns considering size of investments.

We have been getting a lot of requests for expansions in Tier-2 cities, however, we have pushed the agenda until next year to focus and sharpen the model in select geographies and then scale up. It is easy to be on a burn model in a new segment, but we have decided to proceed in a planned, phased and organic-yet-vertical growth trajectory by working with investors who are share our passion for clean mobility and are ready to be part of our journey. We will be shortly opening up our Series B funding round and will look for investor partners who are with us for the full movie and not just for the trailer

Any more policy initiatives from the government that you feel are required for the next level?
Government has in fact successfully subsidised the vehicles, pushed the manufacturers to make quality product at right pricing and the best part is the subsidy amount is directly benefited to individuals and end consumers. However, a similar approach is required in EV charger manufacturing and setting up charging stations by private entities.

State governments have announced grants and PLIs (Production Linked Incentive) schemes for electronics components manufacturers. While the mobile phone, laptop and other consumer production facilities produce millions of units on a monthly basis and take benefit from the PLIs, that may not be true for EV charger manufacturer given the nascence of the industry. As is true with vehicle sales, a similar individual-charger sales will have to be subsidised both from manufacturer’s as well as consumer’s perspectives for this fledgling industry to grow organically. 

Government has also tried their hand in a few hit-and-miss policies around EV charging stations for public use – such as, defining an astounding set of minimum chargers and various protocols to be qualified as PCS (Public Charging Stations) and soon realised the unviability of the same, forcing them to scrap the definition; and capping the earnings by CPOs (Charge Point Operators) to 15% of electricity cost over and above the electricity cost without understanding the investment v/s returns. The subsidies for setting up charging stations are passed on to private CPOs via a PSU or a governmental nodal agency thereby not only complicating the whole process but also slowing down the whole agenda to quickly electrify the infrastructure.

We believe, the government should focus on:
1. Creating strong tailwinds by defining the underlying principles and leave the business modelling and innovations bit to private organisations 
2. Providing access to land, zones and areas owned by state or central government to set up charging stations without much friction in the process
3. Creating a fast-track window to apply and avail electrical connections needed for setting up charging stations with heavy load requirements
4. Creating awareness for transition to electric by means of advertisements and campaigns, and
5. Subsidise the costs of manufacturing chargers and setting up charging stations with benefits directly to private organisations.

The government should provide structure and support and not define the market. These few strategic steps and we believe the whole EV industry and ecosystem stands to benefit.