Yulu bikes, one of India’s pioneering micro-mobility electric two-wheeler players, and Magna, a significant global automotive component supplier, have gotten into a joint venture to launch Yuma Energy. This company offers ‘battery-as-a-service’ or, in other words, a swappable battery ecosystem for electric two-wheelers. Magna put in a total investment of $77 million to set up this joint venture in September 2022 and the service was launched on February 2, 2023.
A part of this investment is for setting up a battery-swapping infrastructure that is operational in about 85 locations across Bengaluru, Mumbai and Delhi, with plans to expand to 500 locations across many more cities by the end of 2023. Yuma Energy’s battery as a service (BaaS) network will cater to Yulu’s rental micro-mobility bikes as well as other electric two-wheeler companies that rely on a battery-swapping model for their mobility plans. The rest of the investment is in deploying more micro-mobility scooters every month.
Matteo Del Sorbo, executive vice president and global lead for new mobility at Magna says the core strategy of Yuma is around creating a network for a BaaS or energy as a service company, like Yulu. “The focus today is originally on low speed, shared mobility, which is our anchor customer, Yulu, and the growth there is quite substantial. We plan to add 10,000 new (Yulu bikes) every month going forward starting in April,” says Matteo.
Battery as a service
The concept of offering energy as a service is primarily a building block for the company, which can extend to other form factors as well, he adds, moving from low-speed to mid-speed electric two-wheelers, to even three-wheelers. The company is using 48-volt lithium-iron-phosphate (LiFePO4) battery packs at present.
“Being able to offer a battery as a service product that is compatible across form factors is really the focus of building a really solid network. That’s absolutely what we’re focused on. Initially, it will be low speed, but obviously, a part of our strategy is to then proliferate that in other use cases,” says Matteo.
While the company isn’t disclosing other partnerships it is pursuing in India, besides Yulu, for swappable batteries, it is looking at other applications besides two-wheelers in India. For instance, Magna caters to last-mile delivery solutions in other markets, which have a swappable battery, and which could be feasible in India too.
Scaling up local production
Magna assembles battery packs for its BaaS business in India – Yuma. Lithium-ion cells are imported and have enjoyed a concessional duty rate of 5%. In the recent Union Budget 2023, Finance Minister Nirmala Sitharaman announced an extension of this concessional rate for another year to encourage EV production domestically. Magna is one company that sees benefits in this.
“Today, we’re assembling battery packs for our business here in India. And that’s the current strategy, obviously, to localise the battery pack assembly, but the cells are important. I think the biggest challenge will be for cell manufacturers to come to India when the volume and scale is there to justify their investment,” says Matteo.
Magna, is a diverse auto components manufacturer from vehicle design to seating systems to battery pack design development, but it’s not in the cell manufacturing space. It, however, partners with cell manufacturers to develop specific battery pack designs for different use cases.
Also read: Yulu secures nine million US dollars (Rs 73 crore) financing from US International Development Finance Corp
Various estimates say electric vehicles could account for between 17 percent to 25 percent of the two-wheeler and passenger vehicle market by 2030 in India. That prediction presents opportunities and challenges for players like Magna.
Matteo says: “I think the market is going to have huge growth opportunities. I think population mobility on a sustainable platform is going to be easier to deploy on a two-wheel or three-wheel strategy as opposed to four-wheelers in this country. The infrastructure for charging is going to be a challenge in India in the short term. So that’s why I think two-wheelers and three-wheeler applications with swappable batteries is where the growth will be.”
The company continues to invest in India. In October, it announced a $120 million investment in Bengaluru for an R&D centre. Magna also has some high-profile global customers, like Fisker, with which it is developing the Fisker Ocean SUV platform that is likely to be launched in global markets this year.