Startup Mantra: Go Big with Small Cars

Entering a small portion of the market of around 10% is startup Vayve, which will unveil its four-wheeler Eva at the Bharat Auto Expo on January 17, 2025. You might say that’s audacious for a startup to enter the ring. against companies with deep pockets. So what can the Eva do, differently or better, that the Tata or MG EV can’t?

A lot actually. If you drive on the roads of Pune, you must be very irritated by traffic jams, parking problems and maneuvering your car in the middle of office rush hour. And as car sizes get bigger and better, Nilesh Bajaj and his co-founders Saurabh Mehta, Ankita Jain and Vilas Deshpande believe this is where urban drivers’ pain point lies. The ever-increasing size of the vehicle makes maneuvering much more difficult.

Nilesh said, “We became victims of city traffic and traveled from Saki Vihar to Andheri to Mumbai for seven years. And while I drove the Volkswagen Vento, I know how many times I wished my car was small and could maneuver in small spaces that sometimes arise in traffic jams. So we thought, why not build a small car for just two people. Yes, there are bicycles, but they are not convenient for distances, carry certain risks, and so on. But what if you had the comfort of a big car, but small, so driving through city traffic was a little easier?”

Nilesh and Saurabh are both graduates of IIT Bombay and have developed a meter used to measure TRP (Target Rating Point) for the Broadcast Audience Research Council. “We developed the software and hardware and used them to manufacture the company’s EMS (electronics manufacturing services),” Nilesh said. Although the duo was doing well, as students they always dreamed of having their own manufacturing unit that would produce the products they created. Add to that the traffic problems, and Eva was just waiting for this event.

In 2020, Nilesh and Saurabh started working on their small electric car, designed exclusively for city driving. In addition to their own driving problems, they took other factors into account.

“In India, the middle class usually buys a car that can accommodate an entire family of four or five people. So, this was not our purchasing audience. But there are families who buy a second car to take their children to school, shopping or to the clinic. Or there are students who value safety and do not want to take risks by riding a two-wheeler in the city. Or just go to the office every day during rush hour. Our two-seater car is for them,” he said.

Lessons from the past

A small four-wheeler electric vehicle is nothing new in Pune. About two decades ago, Reva Electric unsuccessfully built a small electric car. It was later bought by Mahindra. Is Eve going to make the same mistake by building a small car?

Nilesh said, “The Reva was a car ahead of its time. In those days, batteries were prohibitively expensive. These lead batteries could not generate too much power and only lasted for about 100 charge cycles. They were very heavy, not fun to drive, and they cost more than a gas car!

“Today our batteries are lithium ferrophosphate batteries, which are very efficient in terms of energy storage. They last longer, in fact the Tatas give a warranty of 800 charge cycles and if one charge gives you 200 kms, your battery is warranted for around 160,000 kms.

“Given technological advances, it is now possible to provide you with a great car that offers as many features as a gasoline car and also helps save energy, which is influencing the purchasing decisions of more and more people.”

There is another small automotive experience from history – Nano. Created specifically by Ratan Tata of the Tata Group for families who were forced to travel on two-wheelers, the Nano was meant to be a car that was affordable for the common man. But that didn’t work either. How does Nilesh, despite his good intentions, expect a small car to work when even a family that has converted from two-wheelers to four-wheelers has rejected him?

“Generally, a small car is a cheap car. And cheaper means fewer features, which you’ll be expected to make some sacrifices on. But we say a clear no. It’s a myth that a car that’s small on the outside is small and cramped on the inside. We have a small car that will help you drive and park easily. But it offers you all the comforts of a big car and more; leg room, space for briefcase, bags, coffee mug, drink cooler, efficient air conditioning, rear view cameras – everything you can get in a high-end car. It’s just that the car doesn’t take up too much space on the road and offers all the amenities for both driver and passenger.”

But it’s more than just comfort. The Eva has a roof-mounted solar panel that charges the battery while you’re driving or parked in sunlight. “This solar charger can give you an extra 12km of range on top of your battery charge. And depending on the variant, our battery can provide from 125 to 250 km on a single charge. Compared to a petrol car which is said to give 20 km/s per liter it will cost you ₹5/km, operating cost of Eva is 50 paise per km.”

The truth about making a car

“When we started developing the Eva, the cost of the battery was 40% of the cost of the car. Now it’s 30%. Previously, lithium batteries had a different chemistry, meaning they contained nickel, manganese and cobalt (NMC), which are rarer elements than lithium. But new batteries don’t need these minerals, they have iron, and lithium makes up about 4% of the entire battery. We are seeing more Indian companies entering the lithium-iron battery business, which has, among other things, caused prices to fall,” he said.

To create a production-ready version of their car, Nilesh and his co-founders collaborated with tier-1 suppliers and a highly skilled core team in design, engineering, marketing and finance. They brought in senior industry experts in the areas of styling and design, vehicle design and integration, body in white (BIW) design, ergonomics, computer-aided engineering (CAE) and vehicle dynamics, design for production and production planning.

In addition to this, user feedback is constantly taken into account in the design. Nilesh said: “Over the last four years, we have refined the mechanical and electrical design of the Eva, creating three engineering prototypes. We received an overwhelming response from customers at our public presentation in January 2023. Customer feedback has been taken into account to improve the product offering. The exterior aesthetics and interior trim are rounded off by the pre-production version, which will debut at the Delhi Auto Expo 2025.”

They currently have an R&D center in Pune where they have built their startup model. They are currently considering proposals from different cities for the construction of their production. “Maharashtra, Gujarat, Telangana and Tamil Nadu seem like likely hubs, although we also have to base our decision on supplier synergies,” he said.

Competition

Despite being a small fish in a sea full of sharks, Nilesh has a very clear understanding of his car and the market. “Eva is uniquely positioned to focus on a new category of quadricycles that has no direct competitors in India. While other startups like Wings EV and Gensol have unveiled prototypes, they are yet to go into production. Established players such as the MG Comet and Tata Tiago cater to the traditional M1 car category (cars with no more than eight seats, including the driver’s seat) and are not specifically designed for city driving. Therefore, we do not have direct competition with legacy OEMs (Original Equipment Manufacturers).

“Our unfair advantage is developing an electric vehicle platform that can scale to multiple vehicles without any legacy limitations. Electric vehicle technology has the fundamental advantage that the bill of materials (BOM) cost is 50%, dominated by electronics and software, in which we have a core area. Vayve Mobility has a deep understanding of Indian customers compared to brands importing Chinese models.

Money makes it possible

Eva is put into operation until 2022. “We have invested ₹3.5 crores of founders’ money and then received ₹7 crores from angel investors from India, US, Middle East and Singapore. We strive to raise ₹90 crores to complete design, validation and homologation. The funds will be used for research and development, team expansion and equipment, reflecting the capital-intensive nature of automotive development,” he said.

Charging the way forward

Nilesh plans to start with Pune, Bengaluru and Delhi and then move to top 10 cities in two or three years and top 50 cities in five years. “We are targeting cities with populations of more than a million people,” he said.

But to achieve anything, he clearly knows that car sales depend on after-sales service. “It is vital for us to build distribution centers and service centers with the launch of our vehicle. With the help of the EXPO, we are opening pre-bookings for our vehicle, which will be delivered in 2026,” he said.

How long to wait? “Yes, but for a startup it’s a classic chicken and egg story. We don’t have the resources that big companies have to get everything ready and then launch. Even Tesla financed its operations through pre-booking. But this car weighs 2 tons, which is too much energy to transport a person from home to office or anywhere else.”

He doesn’t want to reveal Eva’s price at this point because it’s “too close to launch.” We hope this little car will make a big breakthrough in the electric vehicle industry.