Sri Harsha Bavirisetty along with brothers Rahul and Raja Gayam are three friends who share backgrounds in computer science, internet-of-things, and electrical engineering. They had a vision to establish an electric vehicle (EV) company, but started by assembling and selling internal combustion engine vehicles that burn petrol or diesel.
“This was in 2011, when no one took EVs seriously. Given our exposure to the developed world during our studies, we had seen the future for electric vehicles. We realized sooner or later India will start seeing this opportunity,” Bavirisetty, COO of Gayam Motor Works, told KrASIA.
To sustain their business in the initial days, the company built its own petrol and CNG three-wheelers and exported them to countries like Nepal and Singapore.
“Since this is not a software company, every time you fail [while developing an EV], it’s going to be very expensive as there is machinery involved. So there has to be a revenue generation engine on the side to fund these experiments,” he said.
After three years of research and development to make its first electric vehicle, in 2014, the trio converted an inexpensive petrol-based car to an electrical vehicle, and then tested it for more than six months on different roads and in various traffic conditions. Ensuring that the prototype functioned properly under normal usage was a key step toward manufacturing electric three-wheelers locally.
Once they were confident about the vehicle’s performance, the founders started working on their own design of the vehicle. However, the company soon realized their vehicle was too expensive for passenger use, as its parts were all imported from suppliers that were overseas.
“We identified the components of the vehicle that could be re-designed and manufactured in the country to be cost-effective. The battery was the biggest challenge, as it’s the most critical and expensive part,” Bavirisetty said.
Gayam eventually made their own versions of some components to bring costs down. “Today, we have our own battery technology, we do our own powertrain technology, we have our own software to do all the battery-related maintenance and analysis in the back end. Except for things like the clutch or gearbox, where there’s no scope of innovation, we reinvented other components.”
In 2015, Gayam launched its first EV that could be used for public transportation within the city. “This was the first three-wheeler with a lithium-ion battery. The existing three-wheeler electric vehicles ran on lead acid batteries, which are each priced at INR 90,000–100,000 (USD 1,230–1,365). We have priced our vehicle at INR 300,000, and it has a lifespan of over seven years,” Bavirisetty said. Gayam’s lithium-ion vehicle batteries take two to three hours to recharge, while the existing EVs take up to ten hours to reach a full charge, he pointed out.
But that improvement was insufficient to satisfy buyers. Gayam’s team found out that general vehicle operations had to align with what people were accustomed to. “The recharging experience had to be similar to how a petrol or diesel vehicle is refueled. EVs recharge for around three hours as opposed to five minutes for putting in petrol or diesel. The resistance is obvious because we are asking them to make a behavioral change,” Bavirisetty said.
To solve this issue, Gayam introduced swappable batteries that allowed drivers to replace a spent battery with a charged one within minutes.
In the months after Gayam introduced the battery swapping functionality, the company still didn’t make significant headway into the passenger vehicle market. Gayam soon shifted its focus from manufacturing passenger transporters to cargo and logistics vehicles.
“A lot of applications of EVs is going to happen in the logistics space or public transport. They have fixed routes so you can put charging stations or battery swapping points on these routes,” he said. The electric three-wheeler market in India is expected to grow at a compounded annual growth rate of 45% between 2019 and 2024.
Gayam reworked its vehicle design to suit the needs of delivery and logistics companies. The move took the business to the next level. Now, Gayam works with most e-commerce companies in India, including grocery delivery company Bigbasket, e-commerce majors Flipkart and Amazon, as well as other firms. It has already supplied more than 8,000 vehicles to its clients.
In addition to manufacturing three-wheelers, Gayam started to make electric bikes in 2017. Bavirisetty said these bikes have been bought by police departments in India.
Gayam hopes to raise USD 20 million in a Series A round in the next 12 months, and an extra vehicle is coming to its product line. “We plan to launch our four-wheeler electric vehicle to support cargo and e-commerce delivery partners,” Bavirisetty said.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.