GM India Partner Reva Plans U.S., Europe Electric-Car Ventures
(Bloomberg) — Reva Electric Car Co., the Indian automaker developing an electric vehicle with General Motors Co., plans to set up four overseas automaking ventures that may be profitable building as few as 5,000 cars a year.
"Break-even could happen in 5,000 to 10,000 vehicles, which is unheard of in the automotive business," Chetan Kumaar Maini, 39, deputy chairman and chief technology officer, said in an interview in New Delhi yesterday. The company will cut costs by using locally made components and manpower, he said.
The company intends to form ventures in the U.S., Europe, Southeast Asia and South America over the next few years, as rising oil prices and growing environmental concerns spur investment in alternative-energy vehicles. Automakers are set to introduce 42 electric models worldwide by 2012, according to an October study by PricewaterhouseCoopers LLP.
"Unique partnerships and unique business models are going to emerge in the next five years that we wouldnât have imagined a few years ago," Maini said.
Bangalore-based Reva expects to form its first overseas manufacturing venture in the U.S. and it is discussion with Bannon Automotive, Maini said. A final decision on the partnership will be made within six months, he said. The two companies plan to build a plant in near Syracuse, New York, The New York Times said in October, citing government and company officials.
An electric-car factory with a capacity to make 30,000 vehicles a year will cost about $30 million, Maini said.
At the Delhi auto show, which starts today, GM will be displaying a battery-powered Chevrolet Spark compact, which uses Reva technology, Maini said. The car will go on sale this year, he said. Reva is seeking similar partnerships with other automakers, Maini said.
Reva is building a carmaking plant in the southern Indian state of Karnataka, which will be able to make as many as 30,000 vehicles a year. The company expects to sell that many vehicles annually within three years, with sales evenly split between local and overseas customers, Maini said.
Higher prices have so far stunted sales of hybrid and electric cars. Volkswagen AG has predicted that electric cars will account for 2 percent of the global market by 2020. London- based consulting firm IHS Global Insight has forecast 0.6 percent, while Nissan Motor Co.âs Carlos Ghosn has said they will grab 10 percent.
Reva, which has sold more than 3,000 electric cars in total, plans to begin selling the lithium-ion powered Reva NXR as early as October. The car will cost about 14,995 euros in Europe, the automaker said last year. The three-door, four-seat hatchback has a top speed of 104 kilometers (65 miles) per hour and a range of 160 kilometers (100 miles) per charge.
Reva was established in 1994 as a venture between the Maini Group and California-based AEV LLC. The company showed its first electric car in May 2001.
To contact the reporter on this story: Subramaniam Sharma in New Delhi at email@example.com