Startup Street: How To Build A Supercharging All-Terrain Electric Bike

This week on Startup Street, a homegrown startup from Tamil Nadu creates a crossover two-wheeler that can charge before you finish watching an episode of your favourite show on Netflix. The new government’s first budget eases life for startups and attempts to resolve the angel tax issue. And Finance Minister Nirmala Sitharaman announces dedicated TV shows for startups. Here’s what went on:

Gugu Energy’s Supercharging R-SUV Bikes

A super-fast charging electric two-wheeler that can be used for everything from daily commute to off-roading. That’s what a Coimbatore-based startup has developed as it looks to make a mark in India’s nascent but rapidly growing electric vehicle industry.

The R-SUV, built by Gugu Energy, is a crossover between a scooter and a motorcycle that was designed and manufactured entirely by the startup. But the standout feature of the vehicle is its battery.

“We wanted to move away from the current lead acid battery technology. Though this technology was cheaper in price, it has a low energy density, low battery life,” Guhan RP, chief executive and co-founder of Gugu Energy, told BloombergQuint. “We wanted to build something from scratch and decided to build our products with a completely new battery technology.”

It took Guhan and his team four years to come up with a novel battery technology. For that, Gugu tweaked NMC 811, the most energy dense cathode—the electrical conductor in a battery—available commercially. They reduced the Cobalt content in the battery to less than 5 percent, cutting down on the most expensive material of a battery. And instead of a liquid electrolyte—the catalyst for electricity generation in a battery—used a semi-solid one to increase performance.

“We have estimated the price of our battery pack to be at $160/Kilowatt. We expect the prices to fall below $130/kw in the next three to four years which will be equivalent to that of a lead acid battery prices,” Guhan said.

Still, building the R-SUV was not a cakewalk without the right team. “In India, it’s easier to find software engineers but difficult to find engineers who are ready to build products from scratch. Though we initially found it difficult to find them, over the last few years we have been lucky to have very good engineers to build our products.”

The R-SUV will have two variants: one, affordable bikes with a 130 kilometer range and the second, the long-range variant that can run 300 kilomteres on a single charge. The affordable range will be priced at Rs 1.25 lakh, while the long-range will be priced under Rs 3 lakh. The bikes are also connected to a mobile app that provides nearby charging location and vehicle diagnostics.

Despite the premium pricing, the R-SUV has already received more than 9,000 pre-orders. Gugu expects to launch the vehicles by early 2021. It is also working to launch a mass-market scooter.

To increase electric vehicle adoption, Guhan said, Gugu will install charging stations at a customer’s locality free of cost before they take delivery of their vehicle. “The reality is that people want to plug in where they work and live. We are currently at 1.75 Km/minute charging rate and in future we can have it at 3-4 Km/minute which will ease out the range anxiety problem.”

The startup has raised $750,000 in angel funding so far. It is in talks with investors to raise a $8-10 million in Series A funding to start their production line in Coimbatore with an initial capacity of 25,000 units a year.

TV For Startups!

Finance Minister Nirmala Sitharaman thinks the answer to jolt India’s startup environment lies in television programming.

“We propose to start a television programme within the DD bouquet of channels exclusively for startups,” Sitharman said in her maiden Union Budget speech. “This shall serve as a platform for promoting startups, discussing issues affecting their growth, matchmaking with venture capitalists and for funding and tax planning.”

The channel will be designed and run by startups, Sitharaman said, without elaborating.

Murali Talasila, partner and leader of Startups and Innovation, at PwC India, in a post-budget note, said, “It would be interesting to see the impact of the exclusive TV channel and how it changes the discourse around the startup community in India and makes them fit for future.”

Sameer Aggarwal, founder of fintech startup RevFin, said the channel will provide a platform where they can be heard. “While there may not be immediate returns to startups through this channel, over the long term as the content and participants increase in numbers and quality, the channel could emerge as the leading voice of startups.”

Forget The Taxman, Focus On Business

The country’s startup community should not worry about taxmen and concentrate on their businesses as concerns related to angel tax have been “sorted out”, the Central Board of Direct Taxes chief has said.

All “legacy issues” related to startups will be resolved through a consultative process and under a strict supervision of senior officers of the tax authority, CBDT Chairman PC Mody told PTI in an interview.

In her maiden Budget speech on Friday, Union Finance Minister Nirmala Sitharaman proposed a number of measures to resolve the problems being faced by startups with regard to their initial funding, called angel tax, their certification and verification of investors. “To resolve the so-called angel tax issue, the startups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums,” she said.

With this, funds raised by startups will not require any kind of scrutiny from the Income Tax Department, she said.

Mody assured that startups need not worry anymore since the CBDT is making administrative arrangements to ensure what Sitharaman proposed can be implemented.