Reva Plans Overseas Plants It Says May Be Profitable Making Only 5,000 EVs a Year
By Scott Doggett January 5, 2010
Reva Electric Car Co., the Indian automaker developing an electric vehicle with General Motors Co., plans to set up four overseas automaking ventures that may be profitable building as few as 5,000 cars a year, Bloomberg news service reported today.
"Break-even could happen in 5,000 to 10,000 vehicles, which is unheard of in the automotive business," Chetan Kumaar Maini, deputy chairman and chief technology officer, told Bloomberg in an interview in New Delhi Monday. The company will cut costs by using locally made components and manpower, he said.
This news is particularly interesting when you consider that GM has said on numerous occasions that it doesn't expect to make money on its Chevrolet Volt for at least several years. The highly advertised extended-range electric vehicle is expected to sell for about $40,000 when it enters the marketplace in December of this year.
Maini said Reva intends to form ventures in the U.S., Europe, Southeast Asia and South America over the next few years, as rising oil prices and growing environmental concerns spur investment in alternative-energy vehicles. Automakers are set to introduce 42 electric models worldwide by 2012, according to an October study by PricewaterhouseCoopers LLP.
"Unique partnerships and unique business models are going to emerge in the next five years that we wouldn't have imagined a few years ago," Maini said.
Bangalore-based Reva expects to form its first overseas manufacturing venture in the U.S. and it is discussion with Bannon Automotive, Maini said. A final decision on the partnership will be made within six months, he said. The two companies plan to build a plant in near Syracuse, New York, The New York Times said in October, citing government and company officials.
An electric-car factory with a capacity to make 30,000 vehicles a year will cost about $30 million, Maini said.
At the Delhi auto show, which starts today, GM will be displaying a battery-powered Chevrolet Spark compact, which uses Reva technology, Maini said. The car will go on sale this year, he said. The price of the vehicle has not been announced.
Reva is building a carmaking plant in the southern Indian state of Karnataka, which will be able to make as many as 30,000 vehicles a year. The company expects to sell that many vehicles annually within three years, with sales evenly split between local and overseas customers, Maini said.
Reva, which has sold more than 3,000 electric cars in total, plans to begin selling the lithium-ion powered Reva NXR (pictured) as early as October. The car will cost about $22,500 in Europe, the automaker said last year. The three-door, four-seat hatchback has a top speed of 65 miles per hour and a range of roughly 100 miles per charge.
Reva was established in 1994 as a venture between the Maini Group and California-based AEV LLC. The company showed its first electric car in May 2001.
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