Whrring #2 - BluSmart, BluCharge and now?
BluSmart’s vertically integrated stack
Delhi and Bengaluru folks have seen the BluSmart electric cabs plying across the cities. They provide no surge - no cancellations cab service. I’ve been using them frequently during my trips to Delhi. To find out the EV cabs operator in your city, check out this article and sheet.
Many people have already written how they are a different company by keeping their drivers on payroll. All is not rosy at BluSmart, but that story is for another day.
BluSmart is becoming a vertically stacked company. They have their drivers on payroll, they own / lease out the car from OEMs via EESL. They also have their own app and charging infrastructure, so they act as a CPO (Charge Point Operator) as well. Their high density chargers are concentrated in Gurgaon, Delhi and Bengaluru. I say high density because they have 20 sites with more than 100 guns each. This infrastructure is in place to mainly charge their cabs.
This also shows in the type of charging guns that are available. Most of the chargers are GB/T type, which can be used to charge Tata XPress T EV which forms a bulk of their fleet. The newer Tigor EV, MG ZS EV and BYD E6 all use the alternate CCS2 or Type2 adapter for charging. They have enough CCS2 and Type2 chargers to be listed among the top 5 CPOs in the country!
The network is open to all EV users to reserve a slot at their chargers and charge their cars only BluSmart Cars. This is primarily being done because of the high charger to car ratio. The charging infrastructure, as a whole, is serving the cabs once a day. It would make sense to throw it open to the public to use the chargers, to boost their utilisation rates. Regular readers of this blog know that EBITDA level profitability for a charger kicks in at around 12.5% utilisation rate, or ~3h of continuous charging / charger / day.
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Drivers on payroll - check
Cars purchased / long term lease - check
Charging infrastructure - check
Renewable energy management - check
To integrate further vertically, they need to manufacture their own cabs. Guess what. Gensol group (Blu’s parent company) is headed that way.
Car Manufacturing - WIP.
Uh, but how?
Gensol Group acquired an EV car company called Strom Motors in mid 2022.
Strom caught media attention because of their locally manufactured 3 wheeler reverse trike car. The Mumbai based company unveiled their car in 2018. The founder of the company, Pratik Gupta, is the founder and CEO of Gensol Electric Vehicles company.
It makes sense for Gensol to manufacture a 4W car instead of the promised GEV. Large scale EV auto manufacturing is a complex beast and not many companies starting from scratch have been successful at it, except of course Tesla. I don’t see their cars coming out before 2025 nor would it be available for the mass market to buy. Their manufacturing capacity in Pune is currently capped at 12000 units annually.
The total fleet size of BluSmart is estimated to be around 3200 cars. They would have their laser focus to augment the cars to Blu’s services across the country. I believe they will make more money if they add the cars to their fleet directly and not go mass market. They might prefer to open it up for anyone who wants to manage a fleet of EVs, primarily as taxis and would be happy to set up an entire vertically integrated stack for them. Selling the car to the general public needs a lot of marketing dollars and influencing a lot of influenza.
The strategy for BluSmart has been to try it out on someone else’s platform before you build it. For example, BluSmart started out as a service provider on Uber. They started with 70 cars and collected data to understand the ride hailing and the cab business. They built their app and then invested in growing their business. They started from Gurugram, expanded into Delhi and after a couple of years of operations, they expanded into a newer geography viz Bengaluru. They’ve been using Tata, MG, BYD cars till they can come up with their own BluCar!
Questions were sent to BluSmart / Gensol Group for this story. They acknowledged the questions, but chose to not respond to them.
P.S.: Subscribe to Tesla Club India’s podcast. The next episode discusses potential flaws of BluSmart’s business model, among other things.
Correction : Earlier version of this post said that BluCharge is open to the public. That is incorrect. The article is modified to reflect the same. Error is regretted.
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