Switch Mobility has come closer to realising its eLCV vision. In an Upfront session, Chief Executive Officer, Mahesh Babu, spoke of the in-focus segment to Ashish Bhatia.
Q. You gave us a first glimpse of the IeV Series at Auto Expo 2023. Since then, what has been the on-ground exercise to mature the eLCV to a commercial launch stage?
A. We believe that we are entering a new segment after a successful foray into the bus segment over the last two and a half years. Now in the bus segment for example we have graduated from a three per cent market share to a 20 per cent market share. With India’s first electric double-decker, we have done reasonably well I would say in the segment. Switch is an established brand in India and globally. We displayed the IeV series and at that time it was a concept. I think customers liked it, many of them approached us and that has also given us a lot of inputs. So what has happened in the last few months is that the customers saw the product, interacted and they are now I would say certifying that this is one of the winning products. Some of the differentiating factors include a high voltage architecture which is a 650V system which is efficient and quick to charge. With fast charging, we can do a full charge in less than an hour and can get up to 80 per cent of the charge so this makes the vehicle run around up to 300 kilometres in a day. The more and more the operators run, it’s more economical for them so that is the first part we have ensured.
We have an EV architecture which is scalable and modular across the vehicles which in turn ensures we can get quickly into the market with multiple products. The second part is that we have focused on driver comfort and addressed the change in scenario. We are the first one to launch the IeV series with a column-mounted electronic power steering which will make the drive very comfortable. The shifters are all touch and the driver can walk through the cabin. We have given multiple comfort facilities to the customers. We also believe, the interiors were made very car-like to make sure the lifestyle of the customer moves up in this segment, and it’s going to be a different experience without a clutch. The fatigue levels will come down and then the throughput and productivity of anybody using the IeV series is going to improve. The third aspect is the inclusion of connected mobility solutions so we are offering an app. Switch Ion which will connect the driver app., fleet management, and charging infrastructure on the vehicle so you will have complete visibility and control of the ecosystem around the vehicle. You can improve it, monetise it and monitor it.
We are tying up with the dealers who are part of the current network and are already getting trained so that when the vehicles reach the customers, we have a complete touch point where we are accessible across India. This involves training on the dealer management system and everything else so that they are fully prepared. We are also signing an MoU of up to 13,000 vehicles with big partners like Amazon, Flipkart, and Cathy Transworld to name a few. They believe in the IeV series and are committed. So we have the customers, and finally, we are also tying up with financiers for the vehicle finance. This launch is coming up with a complete ecosystem of not just the innovative product but the channel support, the customers and the financial together for us.
Q. Perceived as a bus company, the bus opportunity was about 16 bn and 42,000 units compared to the new segment which is about 55 bn for 4.20 lakh units. So is it fair to say that this is a far bigger opportunity for Switch Mobility?
A. Our intention is to democratise zero carbon mobility not just by people movers but also in the goods delivery segment. If you look at the people mover segment, we always come up with innovative products and technology that’s how we brought in the electric double-decker, the first in the country. Similarly, we are bringing the IeV series first in the country, with a high voltage system, first in class electronic electric power steering because this segment has not been very driver friendly and there is a transition happening right now. There is the dawn of a new era happening in that segment where people’s lifestyles are changing, and the predictability of route planning is much more. A lot of organised players are coming. What we have seen in the last year is the adoption is a little bit delayed when compared to what our prediction is just because there is only one player in the market but we will come and actually drive this segment.
Q. How are you preparing to take on competition with a legacy advantage associated with their products?
A. I am actually very welcoming of competition because what’s happening is customers will get the best out of it. I also believe the technology that we are using in the process, by which we are adapting and orienting towards the customer and completely working on the ecosystem end-to-end, has given us a lot of knowledge in the bus segment. All of this has gone into the IeV series. We understand the customers, we create products for them, and we look at the ecosystem to support them including charging, financing, dealer network everything I think will be our strength.
We are also aware that EVs will have a challenge from the legacy diesel application. We need to handle our customers and our dealers over a period of time till they pick up the fundamentals of selling and make sure that this is what they believe in. What we are saying is that what we have delivered in the bus segment and what we promised to the customers, I believe Switch as a brand will deliver what we are promising to the LCV segment as well.
Q. As someone who frequents the shopfloor at plants, what is your assessment of supply-side efficiencies introduced and the tangible benefits for the IeV series besides other products in the portfolio?
A. The advantage we have is we are utilising mostly the assembly line of Ashok Leyland. We are using only some processes at the Switch plant to make sure that the EVs are assembled, tested and taken care of. We can scale up pretty fast that’s one; the second one is cost efficiencies will be better both for Switch as well as the parent company Ashok Leyland so we are sweating and leveraging the asset much better. The sales channel is very similarly advantageous because we are using most of the Ashok Leyland channels for ourselves. They are actually very thrilled to see that the new technology products are coming in and they are a part of this transformation and partners in the journey towards this significant transition towards clean mobility. This is a way of tackling challenges through our actions. We also believe that we are creating an opportunity.
Q. What is your core target group for the IeV in its factory form and factor and beyond for special applications?
A. We have already worked on e-commerce players which is volume based business; we have worked on a load category because we are the first ones to launch a 1.7-tonne payload series and even if you look at our payload to unladen weight category, we are at 48 per cent, which is higher in the EV segment than anybody. Our payload is 1.2-tonne for the IeV series whereas competition is much lower when compared to the 700-750 kg so this is a direct benefit to our customers. The per kilometre travel cost of operation will be much more efficient. We already have tipper applications, and we have prepared a waste management application. Our team is already working on cold storage applications.
Q. What is the potential of offering EMaaS backed by an entire ecosystem? Is the customer willing to pay for it beyond the concerns of high acquisition costs especially in the goods carrier segment?
A. I think there is enough demonstration from the three-wheeler segment which is helping us as well in pushing our point of view. What we are saying is if you look at the cash outflow, most of these buyers buy with finance where the financing costs will be high generally. But your fuel cost will be low given that it’s an EV product. We are saying that if you run about 150 km in our IeV series you will save about 17,000 rupees per month so we are doing a complete TCO calculation with our customers. We will demonstrate it to the customers on the ground so we know very well what is the electricity charge, we know very well what are the interest rates for EMI so we are working with a holistic view. That’s why we are bringing financial players, dealers, and everybody together so that they are all part of this ecosystem to prove to the customers. Given that a typical customer in this segment is coming and buying in cash, they will seek full finance and go through the cycles of monthly EMI, our job is to prove to them that the monthly cash outflow makes it a win-win.
Q. The segment that you are catering to is a segment that will also have aspiring owner cum drivers. How do you deal with the bad profile from a financial perspective and give them a level playing field?
A. With an eLCV like the one that we offer, the bank ability portion doesn’t change. So if somebody is creditworthy to buy diesel is creditworthy to buy an EV as well. Most of the organised sales initially will be for the organised sector players. They will have a larger credibility limit, a larger amount and the retail one will take a little time for us to track and work around.
Q. Beyond your signed MoU, what is the demand assessment for the remaining fiscal if not for the mid-term?
A. We are not counting everything on the MoU. The dealerships are going to do an ATL/BTL and are thrilled. In fact, some of the dealers are setting the target themselves and committing to their own targets. That’s very important so we are doing multiple things. We will engage on the ground with the dealership because, in this segment, most are on the ground for a particular region that’s how it works. We’ll have to crack that.
Q. I know that you have your hands full in the domestic market. But given that you are the Global Chief as well, are you harbouring export aspirations for the IeV series?
A. We are looking at those possibilities. Both Nepal and Bangladesh representatives are making their presence felt and part of the MoU signing. They are talking already, and over a period of time, we will reach out to all Southeast Asian countries, and the Middle East. We look at multiple locations to ensure that we will leverage the channel available within the group.
Q. What are the latest interventions that you are expecting from the government to make wet leasing a viable business case?
A. We have been talking to the government on this and the PM eBus Seva scheme which has recently come and actually addressed some of the issues which we have talked about. Which is the premium security mechanism, escrow on viability gap funding, payment for a month’s period and many more points. Both the central and the state government state governments are working to ensure its viability. We have also told the government that we have to bring in operators like what has been done in the case of Transport for London (TfL). Most of the operators run and the OEM gives the vehicle to them. The operators get the funding from the government to run the electric vehicles so the government is thinking about it. I am sure they will look at multiple models. All that we are saying is if you want to scale up large with the PM’s vision of 10,000 ebuses you need to bring in multiple stakeholders. We need to bring in leasing companies, we need to bring in financiers. The OEMs are already in place, and the government is already there on the list of stakeholders so we’ll have to bring in more players to make sure that this can be scaled up to the 10,000 which will work with the government.
Q. As a techie at heart, what are your views on the recent accomplishments of ISRO and the inherent connection between space technology and automotive?
A. It excites me not only as an engineer but as a nation right. What the scientists and engineers have achieved in the Chandrayaan mission as well as the Aditya L1 Mission actually motivates all of us right now. How do we work together? I think management lessons can be taken from these missions. Our management team including me have learnt a lot about how to go about seemingly impossible missions. The electric Switch EiV 22 double-decker comes close when everybody said it was impossible. I think it’s very close and technologically I believe that there will be a lot of explorations happening. If anything has to be done with us, we’ll be happy to work together.
Q. To end with, on the occasion of the 75th Anniversary celebrations of Ashok Leyland, your first memories and what do you think of this fantastic run?
A. I have started my career in Ashok Leyland. In my first stint of about eight years, I was a passionate R&D engineer, particularly in combustion engines. I think from there what we are doing today is more sustainable focused projects in line with the commitment towards ESG. As a group, there are a lot of sustainable practices and governance which has come in. I think we as a group are walking on the futuristic path and I’m very happy that I was there during that exciting phase and also today in this exciting age of technology. Those days, it used to be the Italian and the Japanese technologies we used to work with but this time around I’m happy that we are looking to be more Atmanirbhar. At Ashok Leyland or Switch if you look around, most of the technologies are in-house developments. We develop complete software coded by our engineers and many things are done locally. So I think we have grown along with the country.
