Bengaluru-based electric two-wheeler start-up Emobi is a relatively very young start-up, but it has managed to get onboard not one but two Japanese companies – Musashi Seimitsu (Musashi), and Honda Power Pack Energy India (HEID) – for its upcoming e-scooters.
The business strategy is targeting the last-mile delivery product that can meet the needs for delivery partners, without being expensive.
In a recent interaction with Financial Express Online, Bharath Rao, Founder, Emobi revealed the company’s business plan of becoming the McDonald’s of the electric two-wheeler space.
The idea for Emobi is simple to be the engineering and design house for the product. It aims to onboard interested partners who will set-up micro factories and manufacture the electric scooters. They will not only get access to the Emobi’s supplychain.
“We will monitor the quality of the products manufactured, and to a large extent, our fleet operators and asset holding companies will be the end-customers who would also buy back the products from there. Emobi would inspect the final product, buy it back and sell it onward to their end-customers. That way the franchisee partner has a fixed metric on what is the working capital he is expected to bring in, what is the CAPEX he is required to bring in, and what will be his return on investment over a period of time,” explained Rao.
Currently, most EV makers source and assemble components from their suppliers and few have focussed on having the entire ecosystem in-house. In either case, the business is CAPEX heavy for new entrants. This is where Emobi has a slighty different business case. By onboarding franchise partners, the CAPEX part gets taken care of, in return it is able to focus on developing the product and ecosystem.
“Largely we are more R&D heavy team today with close to about 30-odd engineers. On the assembly side, we have close to 15 technicians, managers & engineers. And the assembly team will scale to about 30 people. Since we’re sort of promoting a micro-factory concept, the intent is to build mechanisms, which is lean in nature. We do not want to have models which have a very high CAPEX, very high OPEX and not much visibility in terms of revenues. We would like to keep the OPEX & CAPEX low so that the revenues milestones for return on investments are much lower compared to, say, larger upfront investments,” said Rao.
Emobi is claimed to be completely bootstrapped with about $2 million (Rs 16 crore) being invested the founder.
Product differentiator
The company had recently showcased its first product christened ‘Kyari’ e-scooter, which comes with Honda Power Pack’s swappable battery and Musashi’s drivetrain. Scheduled for launch in July this year, it is primarily targeted towards the B2B customers.
The Kyari uses a spindle motor, producing peak output of 4.2kW and 18.7Nm of torque. It has a claimed top speed of 75kmph and 85km range on a full charge. It has a claimed load capacity of 150kg.
Rao explains that the idea is simply to manufacture the EVs closer to their point of consumption. Initially Emobi plans to start assembling the e-scooters at its Bengaluru facility, with a modest target of selling 5,000 units in the first year.
This microfactories will also double up as service centre, thus reducing the costs associated with expanding to newer geographies.
“Each micro factory will have a maximum production capacity for up to 5,000 vehicles per month and in a modular fashion the smallest unit will be 500 units per month respectively. The approach and thesis is also the SOPs, the supply chain, inventory management, all of this is something which we continue to digitise while we are in the process of building,” he said.
The idea is to get everything streamlined and then start expanding to newer regions along with Honda Power Pack Energy India’s network.
Emobi aims to make its ‘electric vehicle offering exciting for the consumer’ and not just sell a product that one feels is ‘cheap and thus compromises on performance’.
“We set ourselves as a challenge is seeing how we price our product closer to the low speed EVs in the market, while offering performance that is significantly better and closer in comparison to the leading best in class products in the B2C segment,” he said.
Aspirational performance and exports
One of the key thought process for Rao behind incepting Emobi was not to offer a just run-of-the-mill product, but something aspirational. Rao claims that the electric two-wheeler offering will be in par with the performance of IC-scooters in the 125cc segment.
He estimates that the market for the B2B vehicles is quite huge. In fact, he claims that one of its early customers has a ‘total fleet size of over 450,000 vehicles’.
Responding to query on expansion and fund raising, Rao stated that while the first priority is to deploy 5,000 e-scooters it will look at raising a large capital of $40 million (Rs 333 crore) next year.
Furthermore, while the initial target for sales would be Indian market, Rao says the idea for working with global partners such as Musashi and Honda is to be able to leverage their global reach in the future.
“Honda’s battery swapping network, whether they’re doing it in India, Indonesia, Europe or Philippines is the same. Similarly, Musashi’s powertrain, whether they’re doing it in India, Indonesia, Philippines or Europe is the same. Coming to our product, what we’re building for India is also something which we can pick and take out into those global markets. We will focus on India in the first year, in CY2025, after the 5,000 e-scooters are deployed, we’ve got everything that we want to on the product close to where we want it to be, that’s when we would start looking at getting the necessary certifications, homologations, and assembly partners to take it into other global markets,” concludes Rao.
