Kinetic's e-Luna will be launched in July 2022: Sulajja Firodia, Vice-Chairperson

Sulajja Firodia Vice-Chairperson, Kinetic Engineering, talks about Kinetic Green, electric vehicles, CapEx plans, launch pipeline, policy related to battery swapping and expansion plans among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: You have a special focus on electric vehicles and your company has made interesting developments on the front. Please explain it to us as your company has a focus on the green in two and three-wheelers space particularly? What is your outlook for the company and what are your plans related to EVs?

A: As you know, the Kinetic Group is a well known automotive group in India. We have different companies in our group which focuses on different areas, for instance, Kinetic Engineering focuses on automotive systems, power transmission systems like engines and transmission. On the same line, we have also established a Group Company named Kinetic Green and I am a founder & CEO of the same. The company will focus on electric vehicles. We are one of the pioneering companies in the sector. Kinetic Green is an OEM and has emerged as India's leading electric two-wheeler and three-wheeler company and a lot of exciting work is being done in it. The rest of the companies of the Group like Kinetic Engineering is supplying transmission, gearbox and axle to this company. Similarly, the rest of the companies have also invested in the technology of EV and created parts and tried to come up with innovative solutions related to it. So, each one of us knows that electric vehicle is the future of the automotive sector in India as well as the world because it is pollution-free and is economical for the customers. Today, petrol has crossed the Rs 100 per litre mark and I feel the electric vehicles will just not contribute to reducing the pollution of India and improving the air quality but will also reduce people's expenses on fuel. So, the future belongs to electric vehicles and Kinetic Group is doing good work in the space and would be one of the leading groups in the sector in the coming years.

Q: What is the CapEx plans for Kinetic Engineering and Kinetic Green as you need to invest in technology, expansion and manufacturing products, as we understand that a lot of two-wheeler and three-wheeler chassis and complete gearboxes are already being supplied to Kinetic Green?

A: Kinetic Engineering is one of the leading companies of our Group and its birth is related to the making of Luna. India's supply chain was quite low when Luna was born but the company has invested a lot a developing gear-box, gear shaft engine and machining capabilities for itself. We are leveraging the same technology for making transmission systems and powertrain systems for different companies at Kinetic Engines. As I have said, the future of the automotive world is electric, so, Kinetic Engineering has now embarked on a massive expansion programme to manufacture, develop and sell axles for electric three-wheelers, gearboxes for electric three-wheelers and two-wheelers, chassis for electric three-wheelers and two-wheelers. I am proud to say that the company has made good progress not only to Kinetic Green but we have also started supplying these products to other companies as well. The expansion will take place at the Ahmednagar plant and the company has a plan to have an incremental investment of about Rs 50-70 crore for the next five years. The company already have an infrastructure for the purpose and the specific investments will be for electric vehicles. In fact, the government has a special focus on two-wheelers and three-wheelers in India because 80% of the people in India are riding on two and three-wheelers. So, if we will manufacture lakhs of two and three-wheeler electric vehicles, it will give a scale to the sector and also reduce the transport cost for our citizens. Kinetic is focusing on the same sector.

Q: You have talked about Kinetic Green, an electric vehicle arm of the group. What kind of sale potential do you see over the next few years? Also, what kind of tie-ups do you see as an ecosystem is being built where many companies need the technologies and from where are you sourcing the technology? 

A: As I have said that Kinetic Green is an electric vehicle OEM company of our Group and has been started as a pure-play EV, which means, it is made by an asset-light business model with a completely new manufacturing set-up, new team, new mindset and new technology. In it, we have focused on the ground of electric vehicle technology and we have had a Make in India focus. In the electric vehicle, we have bought a complete range of three-wheelers, i.e., e-rickshaw, e-cart and L5. Proudly, I can say, that 100% of the supply chain is Made in India and 100% IP is with Kinetic Green and we are manufacturing these vehicles keeping the Indian market in mind including the road conditions of India. The company's vehicle is qualified for FRAME-II policy. The vehicles are made for India and made in India. As far as the two-wheelers are concerned, it is quite a big sector and we entered the domain last year itself. I expect that the two-wheelers segment will gain momentum in electric vehicles very soon and even today the situation is such that the demand is more than the supply. So, customers are coming to the showrooms, trying those and have a willingness to buy those. I am bullish for the sector and India is the world's largest two-wheeler market as around 2.50 crore two-wheelers are sold here and I feel that at least 50% of the same will turn electric in the next ten years. The percentage may be higher from this. So, two-wheelers have been our growth strategy and we have focused on Make in India as the segment but we are also bringing international technology. We have recently tied up with a company called Aima Tech. It is the world's largest electric two-wheeler company and has manufactured 50 million electric two-wheelers and have 900 electric two-wheeler patterns. With this company, we have done a technology collaboration and we are co-developing models for India. So, the supply chain will be local but the designs will be global. Through this tie-up, we will bring new products to the market soon. So, Kinetic will not only have home-grown two-wheelers but also international technology two-wheelers. In two-wheelers, we will also bring e-Luna this year and I feel there was a lot of anticipation in the market for the same because Luna has always been a very loved product. If we will bring it in its electric avatar then it will be a unique product for delivery and mass commute in small cities. We will bring beautiful vehicles.

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Q: Can you provide us with a timeline for the launch of products by which these products will be rolled out and how will you market them?

A: Kinetic Green has its independent dealer network. It already has 150 dealers for the three-wheelers and around 200 dealers for the two-wheelers. These exclusive dealerships of the two-wheelers will be taken up from 200 to 500 in the next two years and 1000 in the next five years. So, Kinetic Green will provide a distribution network of electric vehicles across the nation and the entire range will be bought to the customers through this dealership network. We will also have an online platform for e-commerce but I feel that the customers of small cities will be benefitted a lot from the showrooms and services. So, we are emphasising the dealership network to reach the small cities, not only online sales. Kinetic Green has a focus on Green Mobility for Masses, so, we will bring advanced technology but at an affordable price, so that the customer can get the benefit of good products with affordability and services and part availability. So, we have already introduced four models in the market and they are getting good responses. We are selling around 4,000-5,000 vehicles per month from six months of launch. This year by July, we will start production of e-Luna and by October will bring two new scooters from Aima Tech. So, we will have a full range of products from e-Luna as the most affordable venture to high-performance e-Scooter with 85/km top speed and 100 km range with completely new technology at around Rs 1 lakh. So, we will focus on products between Rs 40,000 to Rs 95,000, which is the affordability range for the customers. Kinetic has always had a DNA of having new technology, advanced technology but within the reach of the consumer.

Q: The government has announced a policy related to battery swapping in the Union Budget. How it will change the entire ecosystem of the electric vehicle space?

A: I am a big believer in battery swapping and I think that the particular structure that India has, where we have hundreds of urban centres, which are based in concentrated areas, where there is a lot of traffic within a 5-10 km area and urban concentration. And battery swapping will be of great use for small vehicles like two-wheelers and three-vehicles in this. What happens in battery swapping is like when you buy an engine vehicle like scooter and motorcycle then first you buy a vehicle and then refill petrol in it daily but when you buy an electric vehicle along with its battery then you are buying a vehicle as well its fuel for three years which comes along with the electric vehicle, due to which the upfront cost of your vehicle goes up as you are buying three years fuel in advance. But if you are buying the vehicle on the battery swapping platform then you will not have to buy a battery due to which the cost of your vehicles will be quite low compared to the engine vehicle. This means, if you are getting an engine scooter at Rs 90,000 then the electric scooter without battery will be available at Rs 55,000-60,000 of the same quality and instead of petrol station you can go to a battery station to take a new battery every day or other day, whenever your charges end. So, the battery can go on pay per use basis. I feel that the big oil companies that we have like BPCL, IOCL, IGL already have a big infrastructure at petrol stations and battery swapping stations can be established there at an ease and customers can buy batteries from these stations instead of petrol on a pay per use basis. At the same time, several new start-ups are coming up and I think, it will be very good for the customers and cost of the vehicles will go down well and the customers will not have a tension of battery charging.

Q: What kind of expansion the company will have in terms of production and what numbers are your expecting in the first phase? Also, tell us about the investment that will be made on this capacity expansion?

A: Kinetic Green is at an inflexion point and the company has done well in the last five years and has had a turnover of more than Rs 500-600 crore and has sold 50,000-60,000 vehicles. So, now, we will take a giant leap in ago and have decided to take the company's turnover to Rs 12,000 crore in FY2022-23 and increase it further to Rs 7,000 crore in the next four years. So, a 70% CAGR, which is going to be a two-wheeler electric vehicle and we will grow at the same rate. We are setting up a capacity of five lakh electric two-wheelers a year and one lakh three-wheelers a year and they are being developed at Ahmednagar and Suba and we have established a new plant for the purpose. The company is working aggressively by focusing on different factors like capacity, R&D, top professionals among others. So, it is going to be an exciting opportunity for the entire sector as well as Kinetic Green and we have a good brand with ourselves.