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After creating a niche for itself by making the country's only electric car, Reva Electric Car Company is all set to raise about Rs 70 crore (Rs 700 million) through private equity infusion to fuel its expansion into other segments like mini-buses and small taxis as well as carry out work on fuel cell technology.
"We hope to raise this amount in the next one year and are in advanced stage of talks with domestic and overseas financial investors, including International Finance Corporation," RECC managing director Chetan Maini told PTI.
The company, which has bagged an export order for 500 electric cars from Britain's Going Green Plc, is eyeing sales of 50,000 vehicles per annum in the next five years.
"These would include not only cars but also other city-mobility vehicles like mini-buses and taxis. After having the technology for electric vehicles, we feel it will not be much of a difficulty to manufacture other city vehicles as well and we are currently studying the market," Maini said.
The company, which has its manufacturing facility in Bangalore, has invested Rs 85 crore (Rs 850 million) in the Indian operations so far. It is a joint venture between the Maini group and AEV LLC of California, with the Indian group holding close to 80 per cent stake.
Maini said as part of expansion, the company plans to make a major foray into the domestic as well as export market to increase sales. "So far, we were focussed on cities like Bangalore, Hyderabad, Ahmedabad and Pune. Now we will be expanding to Delhi, Chandigarh and Mumbai."
Maini said the company was also bullish on the export front "especially as the clean fuel technology is more welcome abroad and is given certain privileges. We expect that 30 per cent of our sales in the next five years will come from foreign markets."
The company, which started exports from the UK and was recently granted the European Economic Community certificate for homologation, which qualifies it to enter the European market, is currently test-marketing its product in eight countries including Norway, Switzerland, Japan, Nepal, Hong Kong and the US.
"We want to sell our cars in a big way in Europe as well as Asia," he said, adding the thrust on fuel cell technology was also with an eye to have the best and the most advanced technology in its stable.
However, Maini said while countries abroad rewarded for environmentally-clean technologies like the electric cars, it was the opposite in India. "For example, in Britain a customer of our product will get 1,000 pound support from the government apart from exemptions on parking and road tax. However, in India it is the opposite.
"Even as the government has a five per cent duty for CNG/LPG kits as well as catalytic converters, the materials for electric vehicles attract a 20 per cent duty. This duty structure is absolutely against one of the most clean technologies," he said, adding this made the initial price of the car higher.
Maini said except Delhi and Karnataka, the other states did not exempt the vehicles from sales tax. "On the front of road tax, only Karnataka and Andhra Pradesh have given exemption and I feel these would not help in promoting an environmentally-clean car like ours".
He said the only big support to the car from the government came in the form of a Rs 75,000 subsidy for those buying it, "but this is applicable only to government bodies and not the public, as in Britain, and thus defeats the whole purpose."
The company sells three models of the Reva, the base model costing Rs 250,000 while the top-end airconditioner fitted Classe model sells for Rs 320,000. It has also unveiled a prototype of the fuel cell model and is working on the project.
Maini said despite the initial cost of the car being a "little high", its running cost was much cheaper and efficient. "The running cost of a Reva is just 40 paise per km against that of a similar petrol or diesel run car which requires Rs 2.50 per km," he said.
So far, it has sold over 600 cars in India and another 100 in foreign markets.