Remember the time before Covid struck, when you’d go on long international vacations to experience new cultures, savour diverse cuisines and, of course, shop? We’ve all brought back unique souvenirs, trinkets that are only available in those countries, from such trips.
Sathya Yalamanchili and Deepak MV would relate to that... sort of. You see, in 2016, the two friends found themselves in a Chinese Metropolitan area on a sunny afternoon, where they witnessed regular people using electric vehicles (EVs) in numbers they could not have imagined in their wildest dreams.
The duo point to that very afternoon as the beginning of Etrio, a Hyderabad-based electric vehicle company.
But let’s start at the beginning.
In 2017, Yalamanchili and a bunch of friends started a “fun project” to electrify combustion-based car Maruti Suzuki Alto. And voila! It worked.
The team decided to “retrofit old cars” -- convert old IC engine vehicles into revamped EV units -- on a larger scale. The same year, the Harvard Extension School graduate registered the initiative under eTrio Technologies, an EV retro fitment startup for old three and four wheelers.
In 2019, old friend, auto expert and serial entrepreneur Deepak MV returned to the picture. The duo saw an opportunity in the burgeoning logistics space, and decided to do what they do best, but in the heavy four-wheeler space.
“In the logistic segment, ecommerce is going to be a big driver because of the large ecommerce boom in the country. Most large ecommerce companies, like Amazon, Flipkart, IKEA and BigBasket, have taken on significant commitments or mandates for electrification of their fleet run by their partners,” Deepak, also the CEO of Etrio, told TechCircle.
Another opportunity came along in 2019, when the EV wave began to engulf India, and the central government announced a slew of initiatives, such as subsidies for new EVs under the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) policy, to promote their adoption.
Parallelly, the EV original equipment manufacturer (OEM) space was catching steam. Etrio seized the opportunity and ventured into the EV three-wheeler space, which was witnessing high demand.
“Having had that experience of electrifying existing four-wheelers, we were confident of competing in the three-wheeler space. So we started prototyping our three-wheelers and today, we have made our transformation while we were out to transform the world. We transformed from a retro fitment expert to leading three-wheeler EV OEM,” Deepak said.
Etrio in October 2020 launched its own three-wheeler EV models, called Touro Mini and Touro Max.
Retrofitting old three- and four-wheelers then took a backseat, as the company shifted its focus entirely on the production and sales of the Touro models. It did, however, hold on to the Tata Ace refitment service.
“As we have shifted our focus to logistics, we are not actively pursuing cars. If a large opportunity comes by, we would like to look at it but otherwise, we are not looking at cars,” Deepak said. A retrofitted Tata Ace is priced around Rs 7.75 lakh, while the Touro models cost Rs 3 lakh, he said.
And then the Covid-19 lockdown happened.
The company has since deployed more than 200 vehicles till March 2021, with over 100 more deployments scheduled this month. Etrio, Deepak said, has an orderbook of close to 500 vehicles, to be sold across both B2B and B2C segments.
The company makes its sales through a dealership channel. It also offers its vehicles on lease through tie ups with leasing companies.
“We are already operational in four states, in 10 locations. We look to have a presence in nearly 20 locations in the next quarter, and operate in 10 states in the country,” he said.
The road ahead
The company looks to find a place among the top three EV players in the country by 2022.
“With new OEMs launching in the segment, Etrio’s Touro is able to compete with the biggest players. So, we're looking at establishing ourselves as one of the leading small commercial electric vehicle OEMs, which means anything under two tonnes, whether it is three wheelers or four wheelers. We want to establish ourselves as one of the top three players in the country,” Deepak said.
Etrio looks to grow its revenue 10-fold and have more than 2,500 to 3,000 vehicles on Indian roads in next 12-13 months.
“That's our goal for the next financial year, which would also mean that we would increase revenue by more than 10 times. So, we should touch anything in excess of Rs 60-70 crore in revenue,” Deepak said.
The company did not disclose the current revenue figures.
Government incentives, along with rising diesel, petrol and CNG prices, have pushed users to consider EVs as an alternative.
EVs, Deepak said, save 60-70% of vehicle running costs. A Touro user will save around Rs 60,000-70,000 more than a diesel vehicle owner per year, he said.
“Typically, EVs are expensive but with the existing government FAME subsidy, state government subsidies and other various waivers, the upfront cost of the EV is becoming equivalent to the cost of a diesel vehicle, which changes the whole game. In places like Delhi, some of our products are cheaper than the diesel vehicle,” Deepak said.
The demand for electric municipality vehicles and garbage collection vehicles is also on the rise.
Etrio, which recently partnered with Zypp Electric to scale its last mile delivery, competes with companies such as Mahindra and Piaggio in the segment.
At this point, 20% of the overall three-wheeler market is already electric, Deepak said. The e-rickshaw segment, specifically, is a use case that that has seen massive adoption, particularly in the northern and eastern part of the country.
“However, the segment also sees substandard products at cheap prices. Most of them work on lead acid batteries and come with an expiry date. Within 18-24 months, most of the metal in the vehicles become junk,” he said.
Supplemented by customer demand, the EV industry is moving towards standardised products, he added.
Infrastructure has always been a pain point in the EV space.
“Charging infrastructure is surely the biggest enabler. But today, in the cargo segment, especially in the ecommerce segment, we see that charging hubs are being established by logistics players. In some cases, ecommerce players also support them,” Deepak said.
Additionally, the battery swappable model -- a model where the end-user only pays whenever they swap the used battery with a charged one -- is expected to become the preferred model.
“But we must be optimistic. Charging infrastructure for three-wheelers is still not that a big a problem as they mostly have a fixed route and that makes charging enablement a little easier, he said.
Raising capital is yet another challenge.
"The financial sector is still very reluctant to come forward and participate in the EV story. They may have their reasons, but there is a need for them to come forward and support this,” he said.
However, he added: “I will not complain much because EV is a sector which is being looked upon with a lot of promise.”
The company in September 2020 raised a $3 million Series A round from Singapore-based serial investor Janardhan Rao, also the founder of trading house Triumph Global Group, and multiple anonymous investors.
Co-founder Yalamanchilli has moved on from critical operations roles. He is now an investor and a board member of the company.