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Reva was India's first electric car, launched in 2001. It was developed by Reva Electric Car Company (RECC) based in Bangalore over 7 years of R&D and testing. RECC's vision was to produce environmentally friendly and high quality electric vehicles. Their initial marketing strategy targeted women customers, and they sold over 200 cars by 2002 using local promotions and exhibitions. However, Reva faced challenges of ramping up production and competing with gasoline vehicles as market conditions changed.

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Himika Mahajan
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127 views

Final

Reva was India's first electric car, launched in 2001. It was developed by Reva Electric Car Company (RECC) based in Bangalore over 7 years of R&D and testing. RECC's vision was to produce environmentally friendly and high quality electric vehicles. Their initial marketing strategy targeted women customers, and they sold over 200 cars by 2002 using local promotions and exhibitions. However, Reva faced challenges of ramping up production and competing with gasoline vehicles as market conditions changed.

Uploaded by

Himika Mahajan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Reva: Driving Technology Adoption through Strategic Innovation

INTRODUCTION
In May 2001, Reva, an electric car, was launched in Bangalore (Karnataka) by the city-based Reva Electric Car Company (RECC). Reva was claimed to be India's first zero-polluting, batterydriven car with a running cost of just Rs 0.40 per km. Reva was slated to become the cheapest car in India.

For most of the customers this is the second car and 50 per
cent of the customers are women.

HISTORY
REVA Electric Car Company Private Ltd. (RECC), based in

Bangalore, India, was established in 1994.


Joint venture between the Maini Group India and AEV LLC, California USA.

To manufacture environment-friendly and cost-effective


electric vehicles (EVs). Seven years of R&D earned the RECC recognition in the form

of 10 patents and a globally accepted product.


REVA, India's first zero polluting Electric Vehicle for city mobility, was commercialized in June 2001.

VISION
The RECC has been established with the vision of combining a tradition of excellence and leadership in environment friendly urban transportation, offering the

best value and highest quality electric vehicles anywhere


in the world.

MISSION
The "zero principle" - philosophy of the Maini Group has been the guiding principle of the RECC - zero defects, zero time delays, zero inefficiencies and zero pollution.

This is achieved through Zero Wastage and Zero


Compromises.

REVA project
MOU b/w Amerigon and the Maini group Formal technology transfer agreement Study done by IFC

By 1998 Amerigon focus advance technologies


By 1999 people hired development of electric cars Low capital cost Efforts leverage to different Maini group and R&D centres

MARKETING SRATEGY
Target customers Brand positioning Distribution strategy

Promotion strategy
Test market Commercial launch Post launch

Business model
To keep investments at reasonable levels An effort was made to formulate a manufacturing strategy to suit conditions in India

Efforts were made to re-design the car to reduce capital costs


for manufacturing. For instance, a new bumper was designed using a process used to manufacture overhead tanks in India, resulting in a tooling cost of approximately one-tenth of a similar product produced overseas

Similarly, for the body, dent-proof ABS panels mounted on a


tubular steel frame were found cheaper and more suitable than stamped steel panels

Resulted in a low project cost of Rs. 800 million.


With an operating break-even of about 150 cars per month and a payback period of about 3.5 years to recover all costs, RECC appears to have the right scale and level of investments to be a sustained player. Raising finance for the project was one of the major hurdles, because of the failure of many electric vehicle manufacturers worldwide.

The Reva team tried to learn from the failure of other


companies so as to be able to improve their chances of success and to buttress their own case with the FIs. For instance, battery management was identified as one of the most critical areas (AEVT).

Systematic approach helped the company get support from


ICICI and the Indian governments Technology Development Board in the form of loans totaling about Rs. 122 million.

Business prospects
Energy efficiency (capture 15% of the engery) Low operating cost(estimate rs 0.40 per km) Low maintenance cost

Low centre of gravity(leading to high stability)


Resonable range (80 km on a single overnight) Major saving on life cycle (operation and maintaince costs) Subsidies from government( on energy saving technologies) Reva team had trade off b/w cost and convenience

Initial purchase pattern :


35 % house wife

40% works
10% students Feb 2002 sold 200 cars- Production level 50 cars per month

Innovative method to promote its sale: Local exhibition

Car showcased (major technology companies and


institution in Bangalore) Car used in movies Journalists invited in Reva factory Words of-mouth report (7 day customer contacts)

CORE COMPETENCIES
REVA operates in the core areas of electric vehicles and mobility solutions, technology licensing and licensed manufacturing and

distribution.
Since early this year, the company has become Mahindra REVA, after the Mahindra Group, one of Indias largest and most diverse, acquired a

strategic majority stake in it.


The REVA manufacturing process uses less energy and produces fewer carbon emissions than conventional car companies. This combination of plant and vehicle design and recycling processes, such as for batteries, means that REVA will have one of the lowest dust-to-dirt carbon footprints of any car in mass production

Future Challenges
Ramping up Production (dependent on external suppliers to increase volumes) Change in Competitive Landscape (aggressive players) such as: Maruti 800 Reva Maruti Omni 236,250 249,000 261,292

Tata Indica (Diesel, non-AC)


Daewoo Matiz (non-AC) Hyundai Santro LE (AC)

351,000
330,442 372,000

R&D and Technology Management (qualified R&D


manpower) Government Policy and Subsidies (rate of excise duty or customs duty for imports)

SWOT ANALYSIS
STRENGTH:
No Competition in the Electronic Vehicle Segment. Environment friendly car WEAKNESS: Competition from gasoline vehicles Small size

Economic to Drive (0.4 p/KM)

High Price
Low consumer awareness

Successful in Export Markets (no 1 in UK)

Small driving range (up to 65 KM)

Easy to Drive (gearless, clutch less,


small turning radius)

Easy to park (small size)

OPPORTUNITIES: Huge untapped EV market

THREATS: Government incentives to

Growing demand of green


technologies

gasoline vehicles
Entry of competitors Stringent safety requirements anticipated Availability of hybrid

Rising fuel costs Growing road congestion in urban cities

vehicles

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