Battery swapping start-up Esmito will start its services in Delhi and Chennai before the end of the current fiscal. In a conversation with Mobility Outlook, Hasan Ali, Co-CEO & Co-Founder Esmito Solutions, noted that this expansion will mark the start-up's presence in five metro cities - Mumbai, Bangalore, Hyderabad, Delhi, and Chennai.
“Given the fact that we commercialised our products and services during the second half of 2022 (calendar year), being present in these five cities will be more than enough expansion for us for this fiscal,” he said.
In the process, it is also looking to raise more funds and is hopeful it will close another round before December 2023. So far, it has raised approximately INR 14 crore from HPCL and Unicorn Ventures.
Esmito's client base includes Jio BP, Tunwal E-vehicles, Jitendra EV, Raft Motors, Nexzu, Hayasa, Evtric, EDMRC, ETO, Bounce, and more such players. 'We primarily work with electric two-wheeler and electric three-wheeler OEMs, and are currently partners to 40 such vehicle makers,' Ali added.
CAPEX, OPEX, Tech Expansion
Looking to raise over $15 million, the start-up explains that these funds will be primarily deployed for expansion in these five cities, increasing its manufacturing capability, working on technology and marketing needs.
As of today, the start-up operates on two models: OPEX, which includes setting up and operating battery swap stations on its own, and CAPEX, which includes setting up and selling battery swap stations to third parties. Ali informed us that 20% of the total swap stations it has deployed are on the OPEX model, while the rest are on the CAPEX model.
In some CAPEX cases, its revenue, apart from the AMCs, ends as soon as the battery swap stations are handed to the buyer, but in some cases, the company charges the owner for operating these stations via the software it has developed. The start-up says its swap stations are available in different configurations from four to 20 batteries, and most customers prefer the six-battery configurations setup.
“For expansion, we would like to keep the math to the same figures where 80% of what we set-up will be sold to third parties, and 20% will be owned and operated by us,” Ali said.
In some cases, the start-up has also white-labelled and sold battery swap stations to third parties. In all the other cases, all the swap stations, irrespective of the model, are Esmito branded. Further, Ali shared that its battery manufacturing facility in Navi Mumbai can manufacture up to 2,500 batteries (2kWh each) in a month, and its Hyderabad-based swap station facility can manufacture 100+ swap stations in a month.
Prabhjot Kaur, Co-founder & Co-CEO, Esmito, was previously CEO of the Centre for battery engineering and EVs at the Indian Institute of Technology, Madras, and carried out initial swapping pilots in association with BPCL, Essel Green infra in the cities of Lucknow, Kochi and Mohali. Notably, Professor Ashok Jhunjhunwala of IIT Madras Research Park is regarded as one of India's top voices favouring battery swap technology.
Ali explained that the start-up was incubated in 2018 at IIT Madras, and the team has helped in multiple ways. 'We received a lot of help from IIT Madras in the tech that we have developed both in terms of hardware and software,' he said.
“However the advanced development and deployment of the tech has been done by us,” he added.
Further, he points out that in 2018, when India's EV ecosystem was nascent, the start-up chose to address the battery charging problem because over 85% of India's vehicles are either two- or three-wheelers.
Ali highlighted, “Around 40% of these two- and three-wheelers are deployed in the commercial space where downtime plays a critical role in defining one's earnings. We see battery swap as the perfect choice of tech to minimise downtime and help maximise earnings.”