The Reva Electric Car Company has been selling its signature hatchback in India and Europe since 2001. Venture capital from various sources has kept it afloat but electric cars simply haven?t captured the public?s fancy?or pockets, more accurately speaking. But just as critics were about to write off the project as a failed promise, General Motors got into the game, announcing a tie-up with Reva last year. The Detroit major would provide the vehicle platform and manufacturing facilities while Reva would pitch in with technology for the battery and power management systems. Now, Indian major Mahindra & Mahindra has also entered the fray, buying up a 55% controlling stake in Reva. The latest announcement has moved General Motor to end its relationship with Reva. A key takeaway from all this concerns how intense the competition in India?s fast-growing car market is getting. Even a company whose sales have been languishing suddenly looks delectable. But Reva is not just any company. Carlos Ghosn himself has predicted the day of the electric car, after years of false starts, is just about ready to dawn over the world: ?In 2011 or 2012, we?re going to have to rush to build capacity for both (electric) batteries and cars.?
Huge challenges still need to be resolved. Across the global board, electric cars continue to have limited travel range and recharging stations remain inordinately scarce. But progress is underway. Cross-border standardisation of plugs (for recharging) is close to final stages. Pilots for battery-swapping stations are underway in some places. Elsewhere, work on alternative lithium-ion batteries that can provide faster acceleration and last longer (as compared with lead or nickel ones) is showing promising results. Research on smarter grids is getting more funding. But even the most innovative entrepreneurs will continue to require government incentives to make their work viable in the market for some time to come. Forward-looking governments are responding accordingly. The Japanese government is funding an experiment involving the introduction of electric taxis in Tokyo, where taxis account for one-fifth of transport-related greenhouse gas emissions. French and Israeli governments have announced plans to induct electric cars into their fleet. The Chinese State Council subsidises local governments? and taxi companies? purchases of electric vehicles. Denmark?which, not incidentally, holds the world record for generating more than 20% of its electricity from wind power?has promised not to impose vehicle registration taxes on electric cars till 2012. Look around for similar incentives in India. When you find them, then Reva will have a chance of taking off here.
