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India's Other Small Car

The Reva, Hope-Bearer for Cleaner Air?

By Daniel Pepper

The world's cheapest car, the Indian-built Tata Nano, will launch on Monday, but another Indian company manufactures an electric car that has proven wildly popular -- in London as well as Bangalore.

The capillaries of India's cities are clogged with every imaginable form of conveyance: hulking buses, braying bullock carts and motorbikes stacked with families of five. The result is that most of India's commuters idle in traffic for hours a day. The government is trying to play catch-up with a long string of mass transit projects, but most residents pine for the status, peace and luxury of a car of their own.

The Tata Nano, set to launch on Monday after almost a year of delays, is an Indian-manufactured, gasoline-powered car priced at about $2,000. Billed as "the world's cheapest car," it's also a nightmare for environmentalists, who predict sky-high sales will pollute India's already smog-filled air. So why isn't India's other indigenous automotive invention -- the Reva -- taking the world by storm?

The Reva is the world's most successful electric vehicle. It's manufactured on the outskirts of Bangalore, in southern India, and has fans all over the world. In spite of patented technologies, government subsidies, a groundswell of interest in electric vehicles, though, the Reva is unlikely to dent in the global car market with as much force as the Nano.

That's because the environmentally friendly, near-silent Reva costs three times as much as the Nano, and holds only a limited appeal to poorer first-time car buyers.

"It is very much a second car in the household," says Chetan Maini, the company's chief technology officer and deputy chairman, adding that "the highest growth is in [the] second car buyer [market]."

Despite the current economic slowdown, Reva is nearing completion of a state-of-the-art, environmentally friendly plant in Bangalore. It hopes to produce 30,000 cars a year, with the aim of exporting about half to the foreign market and keeping half in India. Tata, by comparison, plans to churn out nearly 250,000 Nanos after it completes a new factory of its own this year.

Reva has already built more than 3,000 cars, but they're marketed in Europe to a mostly affluent, environmentally conscious, urban demographic. The car needs 7 hours for a full charge and 2.5 hours for an 80% charge -- which makes it difficult for buyers who live in apartment buildings, without access to a dedicated outlet.

"You need to have off-street parking," says Kevin Johnston, the Reva's president of European operations. "It's been a real limitation until now." The company will launch a third-generation model this May, with an extended range of about 75 miles and faster charging times.

So far 1,000 commuters, including a clutch of celebrities, have bought Revas in London, where the car is marketed as the G-Wiz. It's as popular in the British capital as in the company's headquarters in Bangalore. London provides numerous incentives for electric car owners, from a reduced parking charge and no road tax, to waving the congestion charge, which is about US $11 per visit to central London.

"In a G-Wiz," says Johnston, "you can drive for a month for the cost of a tank of petrol."

The rest of Europe has followed suit. France provides a €3,000 subsidy for Reva buyers. Norway cuts the car's import duty and value-added tax, and allows its drivers to use bus lanes. Many European cities plan to increase the number of public outlets where electric vehicle owners can plug in and charge up.

Cracking the US Market

Despite being the cheapest automatic car on the Indian market, the newest version of the Reva, due out in May or June, will have lithium-ion batteries and a solar panel on the roof -- and will cost around US $14,500, or seven to eight times the price of the Nano. The main reason for the price jump from one generation to the next is the battery pack. But Chetan Maini says the Reva is "battery agnostic," meaning that when more advanced, low-cost lithium-ion batteries become available, Reva can improve the car without a redesign.

Still, the price of the Reva varies considerably, depending on where it is sold. One of the cheapest places to buy the current Reva is New Delhi, where tax breaks and subsidies bring the car's price to around 300,000 Indian rupees, or $6,000. That's about a third of what Sean McGuire paid for his Reva in western Ireland.

A football fan, McGuire regularly drives to a nearby stadium where he plugs his car in to an available outlet. He put 11,000 kilometers (6,855 miles) on the vehicle in its first year, and plans to order a windmill to power it with zero emissions. "They go from village to village in India on terrible roads, so I presumed it would be just what I would need in rural Ireland," says McGuire. "It's brilliant."

That sentiment may be echoed by thousands of potential electric-vehicle enthusiasts in American cities. The reason the Reva isn't yet available in the US is the same reason many European cars don't appear on America's roads: strict safety and testing regulations make the cost of entering the US market prohibitively expensive.

Like golf carts and other small electric vehicles commonly found on corporate campuses and retirement communities, the Reva, with a top speed of 65 miles per hour, would be barred in America from driving on roads where speed limits exceed 35 miles per hour. These smaller vehicles "don't have to meet the same safety standards, but the problem is there's not a category between those and the conventional vehicles," says Daniel Sperling, director of the Institute of Transportation Studies and a professor of transportation engineering and environmental policy at the University of California, Davis.

"That category doesn't exist in the United States but does exist in Europe," says Marc Geller, spokesman for Plug in America, an electric vehicle education and advocacy group. "The market is so small," says Geller. But he insists that despite the market's small size, "if someone comes out with a fairly expensive electric car there is going to be greater demand than supply."

If the Reva were legal in the US, it would be significantly cheaper than the price analysts are expecting for the Volt, the most anticipated electric vehicle in America, when it hits showrooms in November 2010. Analysts estimate the Volt will be priced at around $40,000, but after federal and state subsidies and tax write-offs the price could be closer to $30,000.

That might bring it within range for many middle-class Americans. But it's still the price of fifteen Tata Nanos.