Udaan Plans To Expand Its Product Portfolio With 4-Wheeler Mini Trucks

With an aim to offer sustainable medium for urban mobility in India while considering environmental aspects, affordability, and last-mile connectivity, Mitull Batraa started Udaan –e-rickshaw and, and e-cargos manufacturer in 2015 is now planning to expand its product portfolio with four-wheeler mini trucks, E-Rickshaws, and E-Cargos among others.

Speaking to Opportunity India, Mitull Batraa, Co-founder, Udaan shares his struggle and journey so far in the ever evolving electric vehicle market in India and says, “Since inception, our constant endeavours to offer superior products with unmatched quality have made us the preferred choice of buyers in the electric three-wheeler (E3W) market. Following are the excerpt from the conversation:

When did you start this business and how did the very idea come up?

Batraa: I co-founded Udaan in 2015 and the idea of the venture stemmed from the need to offer a sustainable medium for urban mobility in India. In addition to environmental aspects, we also took into consideration the affordability and last-mile connectivity issues into consideration before launching e-rickshaws and e-cargos under the brand name of Udaan. Since inception, our constant endeavours to offer superior products with unmatched quality have made us the preferred choice of buyers in the electric 3-wheeler (E3W) market.

What challenges did you face in running this business?

Batraa: Running any business comes with its own set of unique challenges and the same is with the E3W segment. Less awareness about E3W in the market at the outset of the business was one big issue that mandated us to put extra effort into sensitising the market about the range of our products.

We also faced challenges in sourcing quality supplies for our products initially besides contending with regulatory challenges and compliance issues during the early days of our operations. Thankfully though we tide over all these obstacles in time and today stand strong as one of the leading E3W manufacturers in the Indian market.

Is there anything your company provides that entrepreneurs can learn about?

Batraa: We have been successful in cracking the highly competitive E3W segment and have been consistently ranked among the market leaders in the country. What entrepreneurs can learn from Udaan is how to know the pulse of the target market and then put in concerted efforts to deliver superior value to prospective buyers. In addition, our business model is an ideal example of practising customer-centricity while taking into consideration the interests of partners and intermediaries with equal intensity of care and concern. 

What is the lesson learnt so far in this journey?

Batraa: We have learnt that the entire gist of running a business can be summarized in three core aspects: creating, communicating, and delivering superior value proposition. We also have understood the importance of creating an ecosystem and by striving to create a win-win situation for all stakeholders, businesses can stay relevant in the long run. Not to mention the importance of training and developing employees as they are flag bearers of the brand and can become instrumental in taking the success of the business to the next level.

 I would like to know about the new plans you are working on.

Batraa: We at Udaan are strengthening our manufacturing capacity and expanding our dealership network across the country to reach and strengthen our presence in high-growth markets. The company is also upping its research and development efforts to come up with products that have powerful motors, better performance, and superior safety credentials among others. Our product portfolio is likely to widen in the near future with more products joining in categories of 4-wheeler mini trucks, E-Rickshaws, and E-Cargos among others.

Anything you would like to advise young entrepreneurs?

Batraa: It is absolutely essential for entrepreneurs to create superior value for their target markets. The benefits your products or services deliver are the ultimate litmus test and if you become successful in exceeding the expectations of consumers, you'll stay relevant in the business in the long run. Also, it's important to keep a close tab on the profitability of the venture as the erosion of margins needs to be tackled on an urgent basis. 

How do you compete with other brands in this sector?

Batraa: The focus of our competitive strategy has always been on delivering superior quality products to our target market. We have a laser-sharp focus on customer satisfaction which is reflected in our commitment to establishing a complete value chain for our products. We have integrated manufacturing and assembly lines and thanks to the constant support of the research and development cell, Udaan has been successful in carving a place in the market. We are also ramping up our dealership support and by expanding our presence to new high-growth markets, we are sure to enhance our market share going forward.

What challenges did you face in raising funds for the business, if there were any?

Batraa: We started Udaan and invested our own money to start its operations. In other words, Udaan is a bootstrapped venture that achieved a INR 7 cr turnover in FY 2016-17 and crossed the INR 140 Cr mark in the last FY 2022-23. As we aim to double our revenue each year, Udaan is exploring funding opportunities from investors, venture capitalists, or strategic alliances who share our vision of electrifying mobility in India. We are also open to listing Udaan to raise money from the public for funding our growth and expansion plans in the future. 

What challenges are there for the OEMs in the industry?

Batraa: Challenges for OEMs in the electric mobility segment are multifaceted. From sourcing the raw materials to establishing manufacturing lines, the absence of an EV ecosystem makes it difficult to create a dynamic value chain for products. Regulatory changes also create disruptions as constant shifts in the specifications, compliances, and norms impact both the sales and scalability capacities of firms. In addition, keeping up the pace with the ever-evolving customer landscape is also a challenge that OEMs are facing in the EV industry.

What is the idealisation for EV Mobility in the tier 2 & tier 3 markets in India?

Batraa: Since the start of 2023, India has witnessed sales of around 90,000 EVs per month and the encouraging thing is that this demand is transcending beyond metro regions. A significant chunk of EV sales are now coming from tier 2 and tier 3 cities and going forward, this trend will help the country to make a fast transition to clean energy. Importantly, this shift in demand is also creating new opportunities in manufacturing, supply chains, and technology development, thereby helping these regions to take their growth story to a different level altogether.

What are you expecting from the FAME 3.0? 

Batraa: Amidst the news that total fund allocation in FAME 3.0 may jump to INR 30,000 crore from INR 10,000 crore, we are expecting the upcoming version to make effective use of subsidies for establishing an ecosystem for EVs in the country. The focus of the aid should be on reducing the upfront cost of EV manufacturing, building charging infrastructure, and bringing the supply chains here in India to encourage local manufacturing of EVs. E-Rickshaws should be given special preference in FAME 3.0, as they have been spearheading the EV ecosystem in this country. Inclusion of LEad acid battery based E-Rickshaws in FAME 3.0, is the need of the hour to make the benefit worthwhile for the end customer. Finally, We expect the government to invite our E-Rickshaw representative body, EVMS, in rounds of discussion for framing FAME 3.0.

Is there really a need for subsidies for the EV sector as many players are saying that there is no need for it in the long run?

Batraa: We at Udaan firmly believe that the provisions for subsidies are only relevant in the short to medium run when the industry is contending with the establishment of an ecosystem for EVs. E-Rickshaws as designed for the Economically weaker section of society, need maximum amount of push by government via incentives and subsidies. However, In the long run theIncentive system should change to direct subsidy transfer to EV Customer account to avoid any hoarding of incentives. Therefore, it's imperative that the government should offer target-based subsidies for the short and medium run while simultaneously planning to phase out these incentives in the long run.