Switch to SaaS, it’s time for BaaS

OThe Electric and Ather Energy are almost household names in the Indian e-car space and the two Bengaluru-based electric two-wheeler makers could be well on their way to setting up a new ‘Hero vs Battle’. Bajaj” of the 2020s as electric two-wheelers accelerate sales. With wallets hurting, thanks to high petrol prices per liter that barely last a few days, even on the most efficient and fuel-guzzling petrol two-wheelers, it may still be a few more years before until sales of electric two-wheelers begin. resume the sale of ICEs. But what if someone questioned the very concept of “vehicle ownership”?

This idea intrigued Vivekananda Hallekere, the founder of another Bengaluru-based startup in 2017. As the Namma Metro in Bangalore began its rollout, he thought that many commuters using it, and later the Metro in Hyderabad too, abandoned their private vehicles or did not have any at the start. Yet they had problems getting from their homes and offices to metro stations – a “first mile” and “last mile” problem. His company, Metrobikes, had a solution. A fleet of two-wheelers across Bengaluru that anyone can use with their smartphone app. Users will be charged per kilometer. They have become a massive two-wheeler customer and have rolled out thousands of scooters to southern cities. These “app-enabled” scooters were a big hit, but that wasn’t the end of the innovation around ownership.

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Emergence of Bounce Infinity

Seeing the traction that electric two-wheelers were gaining, Hallekere and his co-founders Anil and Varun Agni, their management team and their investors made some important decisions. The first would be to switch to the electric revolution. The second was a name change – Metrobikes became “Bounce Infinity”. At the start of the pandemic, things were tight, but Bounce engineers continued to work on multiple products. The innovation, however, wasn’t just in the hardware; in fact, car reviewers who have tried Infinity e.1 described it as basic, especially compared to the Ola S1 Pro and Ather 450X, but say it delivers the performance it promises.

The real innovation comes from the business model that Bounce Infinity offers with its product. Customers can buy it directly, with a battery, like other electric two-wheelers. However, customers can also purchase ‘battery as a service’ or ‘BaaS’, allowing customers to pay only for the e.1 upfront as low as Rs 60,000 and then be charged each time which they exchange for a new, fully- charged battery. But there is more. The company offers models similar to that of mobile operators. Customers can have pre-paid or post-paid plans which significantly reduce the cost per battery swap – from Rs 85 that users would pay without a plan to Rs 65 – or even less with some plans.

Hallekere explains that the batteries will be the company’s asset and can be tracked online and cannot be charged at home. However, customers who purchase e.1 or later products with the battery will be allowed to charge them at home. The company partners with oil marketing companies and is forging ahead with local retailers and even real estate companies and corporate offices to establish a network of exchange stations.

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Policy of MoRTH and NITI Aayog

Added to this is the Ministry of Road Transport and Highways (MoRTH) draft policy for battery swap solutions. The MoRTH and NITI Aayog have jointly proposed it for the growth of electric two-wheeler space and Nitin Gadkari and Amitabh Kant have publicly stated that battery swapping is the future of the industry growth. They came up with business ideas to get swappable batteries operational across multiple brands of scooter manufacturers. No one, after all, buys a motorcycle with a full tank of gas and the concept of upgrading to a fully charged battery in minutes is like refueling at a gas pump, eliminating the double trouble of autonomy and time anxiety. used to charge a battery. And just as mobile charging has given small shops another viable line of business, battery swapping could become a new business opportunity across India.

Of course, this is not an idea without certain risks, but thanks to widespread data networks and batteries, their location, state of charge and gradual deterioration can be monitored. A battery that has started to degrade, assuming it can only hold three quarters of its capacity after a few months of use, will be removed from the scooter fleet and used as energy storage like a UPS system in homes and offices.

This is all very new, but looking at the latest two-wheeler sales data for April 2022, the urge to buy motorcycles does not go away. Sales of two-wheelers in April 2022 rose 38% from the same month a year earlier to nearly 1.2 million units, with the country’s top manufacturer, Hero Motocorp, selling more than 410,000 motorcycles and scooters. Still, it was Ola Electric that made waves last month by recording shipments of 12,691 scooters, a full percentage point of the total, but it’s worth remembering that this came out of nowhere.

The psychological need for ownership, especially in a country like India where rental models are still in their infancy, might be the biggest challenge for Bounce Infinity, even if some of the assets are with you.

It is only reasonable to have doubts about the viability of the battery swap concept, even though Bounce Infinity has performed over a million swaps on its fleet of shared mobility electric scooters in Bengaluru and Hyderabad, proving that the concept can work. Indeed, it plans to launch its shared scooter service in the National Capital Region (NCR) soon but before that, deliveries of the e.1 will begin in earnest. The battle for the hearts and minds of Indian two-wheeler consumers will not be a two-way battle over products, but a battle over business concepts and products.

@kushanmitra is an automotive journalist based in New Delhi. Views are personal.

(Edited by Srinjoy Dey)

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