Will stay focused on Delhi & Bengaluru, open charging hubs for biz: Jaggi

Jaggi also won't mix the electric DNA of the company with either hybrid or any other fuel cars. But he has other plans to improve revenue

Despite shaking up the ride-hailing market with a novel option of electric-only pre-book cabs, Anmol Jaggi, co-founder, BluSmart, does not plan to go beyond his existing cities of operations. He also won’t mix the electric DNA of the company with either hybrid or any other fuel cars. But he has other plans to improve revenue, he tells Shreya Jai in an interview. Edited excerpts:

BluSmart has emerged as a third alternative in Delhi-NCR and you recently launched in Bengaluru too. Which other cities will you expand into?

We have no intention to venture outside these cities for at least another year. There is more than enough demand for us in these locations. We need a network effect to improve our profitability and that will come only when we operate in the same geography. If I start operations in a new city today, my cars would be isolated there. Profitability will come with depth and the network effect. We will move to a third city when we have densely penetrated these two geographies. In the next two years we should hit the 20 per cent market share in these two locations. In Delhi-NCR we are 4 per cent right now, and Bengaluru 1 per cent.

That restricts you in competition with Ola and Uber?

We will compete with Ola and Uber in these two locations, which comprise 45 per cent in the country’s ride-hailing market. We want to be the king of the 45 per cent. We do not want a market share of the number of trips. We want a value market share.

Cab hailing for electric vehicles (EVs) is neither a novelty any more, nor is it a customer-attracting proposition. What will set you apart in this crowded market?

No cancellation, no surge, clean car -- the customer cares for only these. Since the beginning we have been saying electric is just good for our balance sheet and of course for the environment. But the customer only cares about these criteria. There is a shift towards premium products in the economy, which is reflected in our bookings also. We are buying premium cars in bulk, because there is a huge demand for it, plus the unit economics works better for us too. A premium car gives Rs 40 per km as against Rs 28 for a normal fleet.

Carmakers are betting on hybrids. Your position?

Our business DNA is zero emission. With electric, we will have no emission from tailpipes. We will also make charging hubs to run on renewable energy, which would decarbonise the business. If hydrogen becomes feasible in a few years, we might consider that. Our pace of growth is equal to the pace of growth in charging infrastructure. We will create more of it.

Are you looking at additional revenue by opening up your charging infra for third-party use?

We have 33 charging superhubs with 4,000 charging stations. And 15 are under construction. Capacity utilisation at our charging stations is 30 per cent. We will open our charging hubs for third parties. Tech development for it has been completed. This will include logistics companies, other fleet operators, etc. These hubs will have a mix of chargers. We have the cheapest charging because our utilisation is higher.

How much of your EV fleet is refurbished and what is the battery-replacement plan?

We believe the asset life for cars is not four years but eight. We have done refurbishment for 50 cars and they are back on the road. Any car that completes four-five years we will refurbish and then run it for another two years. This increases our profitability because by the time the cars are refurbished, they are free from equated monthly instalments. We are selling these older batteries to renewable-energy projects for stationary storage. I have personally invested in a battery-recycling company called BatX Energies. It is into end of life recycling and we will sell it to BatX too.

Any fund-raising plans for BluSmart to support these new plans?

BluSmart has raised $109 million till now. We have enough capital. Debt is easily available. We have more than 150 investors. One thing we want to be frugal with is capital. Our return on capital should be 10 times our competitors’. Whenever we list BluSmart, we (founders) won’t want a 5 per cent stake but 60-70 per cent.