The PURE EV team members have been great hosts. We have a car at our disposal for the entire trip. (Confession - Amit Reddy also had provided me with one.) Also, they booked us in the swankiest hotel in Sangareddy for our stay. Sangareddy is almost 50 km away from Hyderabad. The factory campus is adjacent to the IIT Hyderabad campus. The sales and R&D team sits in an old school campus. Kind of collegial atmosphere as a result. Part of the R&D still continues to operate out of IIT Hyderabad, where Nishant continues to teach courses in Mechanical engineering. I did see some stuff that he has done related to battery technology.
The biggest investor in PURE are the promoters of Natco Pharma. (Incidentally, relatives of our friend Amit Reddy.) The company clocked a revenue of 10 cr in 2019-20. It is on a batting average of around 100 CR this year. Headcount has also gone up - there are almost 300 people in the team now. PURE seemed to be in the midst of a new round of funding. Both Rohit and Nishant were busy with an investor meet - and could only spend 15-30 minutes with us in the evening. We could validate the increased sale with a truck count. During the course of our one day factory visit, we saw 3 trucks of finished goods being loaded. Each truck carries 40 vehicles. If we assume the invoice value of Rs. 60,000 per vehicle, then we can say that one truck is valued at Rs. 0.25 cr. So sales per day is around Rs. 0.75 cr. Annual sales of 300*0.75 = Rs. 225 cr. PURE definitely seems to be on a roll.
Some Dealer Stories
We started the trip by doing some customer stories. Also talked to one of the 6 dealers in Hyderabad - the young Vinay Reddy of B-Drive Motors. He and his mom run the dealership at Kukatpally, a predominantly middle class locality of Hyderabad. The dealership is located next to the Metro station and a busy bus stop. Thanks to the combination of location and crowd, there are about 20-30 walk-ins every day. One wonders why the earlier businesses at this location did not work out. This was earlier an HDFC bank outlet, and then later on a restaurant. The premises are quite spacious. Must have been over 2,000 sq ft, including a basement storage area. Sales today are hovering around 30 vehicles a month. Not too bad, considering that the dealership is just 3 months old.
Vinay comes from an IT background, and so does his mom. Mom is still active in the SAP space - and is as much a driver of the business as her son. The duo are helped by an excellent support system of the PURE EV team. There are training programs for dealers sales and service executives. There are 2 sales guys and 2 service technicians. I wonder if your typical outlet really requires that many service people. As of now, there have been only 2 incidents that have required service - a harness replacement, and a failure of the DC to DC converter. As a courtesy measure, the B Drive team loans its service customers a dealership vehicle while the customer vehicle is under repair. Almost 80-85 vehicles have been sold in 3 months. Investments in the dealership are around 70 lakh. Costs run to around 3 lakh a month, the biggest component being the rent at Rs. 2 lakh a month. So to get a RoI of say 25%, you will need to make an annual profit of Rs. 17.5 lakh, or Rs. 1.5 lakh a month. So gross profit of Rs. 4.5 lakh a month. The margin per vehicle is about Rs. 10,000 a month. (Average CP is about Rs. 70,000) So you need sales of 45 a month to get to your target RoI. In future, there can be good sales for battery packs independently. The current pricing is Rs. 55 K for the 2.5 kWh pack and Rs. 35 K for the 1.8 kWh pack.
I spoke to Rohit the next day, and he informed me that most dealers are close to reaching that figure. One of the reasons the investment figure goes up is that the typical time between receipt of the advance payment - and delivery of the vehicles by factory - is 25 days. So PURE’s working capital seems to be dealer financed to a large extent. Incidentally these are the figures for a gold dealership. For a silver dealership, area and inventory requirements are lower. And so is the margin. There is a cap on vehicle supply for the silver dealerships. The gold ones can order upto 100 vehicles a month, the silver ones, only 50.
I asked Vinay about vehicle improvement areas. Vinay’s customers are big fans of the EPluto 7G. To the extent that there are always waiting lists for these vehicles. His first wish was to get the 7Gs into the showroom asap. The company follows a uniform delivery policy, irrespective of geography, so the lead times are the same across the country. There is a system of 100% advance payment - and even then it takes 20 days for the vehicles to arrive. Given the reasonably high margin, I assume that the dealer working capital addition because of this is tolerable. On the finance front though the valid crib is about finance options for prospective buyers. This is more an industry than a company specific problem. The best rates will be delivered by banks, not NBFCs. And banks are conservative. They want to have more data about maintenance costs and resale values before they take the plunge. Hopefully, with a few more years of sales under its belt, PURE will be able to convince banks about issuing loans for its vehicles.
There were the usual cribs about seats being small and dicky space unavailable. Spoke to Nishant ji about the dicky space - and how a sloping battery can create that space. Nishant ji has promised to act on it by Sep 2022. Vinay did talk of mobile chargers - and that I think is an ask which should not stretch the company too much. Talked about it later on, and the design team said that it should happen by Jun 21. There was an issue of visibility of the LCD console in the sunlight. PURE will be switching to TFTs by Sep 22. And then there was a suggestion of connectivity. This will take time, as PURE has still not been able to identify good Indian vendors for the telematics hardware. One ergonomics related problem that Vinay pointed out was the ETrance Neo handle hitting the rider’s knees when you take a U turn. I guess this vehicle is best for folks under 5 ft 6 inch - and with Vinay being way taller than that - he will suffer. My advice - he should use the about to be launched ETryst bike. That’s more suited for his height. And a little bird whispered into my ear that he will be receiving one in April!
ETryst Electric Motorcycle
The high point of the visit was testing out their motorcycle - the ETryst. It is a Honda Unicorn look-alike. PURE procures the components from different manufacturers and assembles them together. They have different vendors for the frame, the plastic panels, the motor, the BMS and controllers. The motor delivers a peak power of 3.5 kW - and can do a sustained power of 2.5 kW. The battery is 3.5 kWh. Hence the name ETryst 350. The battery is NMC - and weighs almost 23 kg. Took the vehicle out of a 35 km ride. Does 0-40 kmph in 5 seconds. The 60 km mark takes more than 10 seconds though. Found the torque to be adequate for most driving conditions. The front tyre is 19 inch low width one with straight treads. I guess the narrowness of the tyre helps with the range. The rear tyre is a 17 inch one. I asked Shikhar, from the PURE EV design team, about the reason for the different tyre sizes. One of the main ones is electrical. You can run the rear speed at a higher rpm if the wheel is smaller. This means that the hub motor can run at higher rpms - meaning lower internal gear reductions. Shikhar told me that this configuration is standard for a lot of performance bikes - including models like the Honda CBZ.
The first 10 km of the ride was on the roads behind IIT Hyderabad. The road follows the boundary wall - and has sharp curves after every few hundred meters. Could touch 40-50 kmph in that ride.. The next 25 km of my ride was on the 4 lane Sangareddy Hyderabad highway. 80 kmph came easy, could reach 85 kmph after some struggle, Surprising considering that the motor is a direct hub drive. Road handling at 80-85kmph speed was not up to the mark - lane changing required me to reduce the speed. There was a patch of concrete road with a small gap between the concrete slabs. During a lane change there, the front tyre stayed in that gap for much longer than it should have. The comfort zone for the bike is when it is commuting at speeds of 50-60 kmph on highways.
Made a few suggestions to the design team. One was to have a more aggressive regen. The regen at 60 kmph upwards is quite good - but seemed a wee bit less at speeds below that. Another was to modify the chassis to have a frame which follows the exterior contours of the frunk (or in ICE parlance - fuel tank.) In conventional ICE motorcycles you have the tank which goes down on both sides of a central frame element. Since you are storing petrol inside, functionality does not get affected for that reason. But for a storage area, a central member will actually be quite dysfunctional. By splitting up the central support to two side supports, you can create space for your helmet to fit in. The last suggestion was about the battery compartment. It is today the lowest part of the vehicle. Currently, though the contours of the compartment slope, the battery stands vertically inside it. By placing the battery at an incline inside the compartment, one can reduce the depth of the compartment by a couple of inches. Not only will this result in better road clearance, but will also lead to added safety.
In design, we also tried to brainwash senior design team member, Mahendra, that he needs to do the same incline treatment to the EPluto and Neo ETrance. No commitment, so far on that. Rohit mentioned that they have their hands full with the motorcycle project - and so don’t want to invest R&D bandwidth in this project. I did manage to badger Mahendra into committing on a USB charging port incorporation by July 2021! A logical area to put the port would be the dicky. Rohit mentioned that electronics is going to be the focus area in the months to come. Till now, the company wanted to get the mechanicals right. Have got the design team in touch with CEE for BMS, cluster and e throttle.
Battery Pack Insights
The battery pack uses 18650 cells. Here is a Wikipedia entry for these cells. Most rechargeable cylindrical cells use a chemistry with a nominal voltage around 3.7 volts. Generally for batteries with nominal voltage of 3.7 volts, full charge voltage (100% charged) is 4.2 volts and fully discharged voltage (0% charge remaining) is 3.0 volts. Commonly-used designation numbers indicate the physical dimensions of the cylindrical cell, in a way similar to the system used for lithium button primary cells. The larger rechargeable cells are typically assigned five-digit numbers, where the first two digits are the diameter in millimeters, followed by the last three digits indicating the height in tenths of millimeters, for example, an 18650 has 18 mm dia and is 65 mm long. Some cells are also available with an internal protection circuit to prevent over-discharge and short-circuit damage. This can increase their physical length; such 18650 cells may be 68 mm long, when they are fitted with an internal protection circuit.
The BMS uses a voltage and current based SoC prediction. The fluctuations in SoC have reduced with modifications in algorithms. But the BMS is still not using predictive and corrective current sampling algos. The cell terminals are laser welded inhouse. There is possibly some kind of advanced material that they are coated in. This ensures that the entire pack is at the same temperature. We found an experiment going on in the IITH lab where about 25 different sensors had been installed - and data was being collated during charge and discharge.
The next day, the young Shahrukh Khan, actually a 3 year old veteran at PURE EV, took us around the assembly area. Though it is only March, the temperatures had started rising. And we were thankful to the Antarctic branded mega coolers that had been installed all around the factory. We went to the powder coating area first. This is where the battery pack gets painted. The pack is first phosphated and then put in for the company’s trademark rose gold powder coating. I asked Nishant later on about why not Aluminium for the pack. The battery pack material has to simultaneously be a good conductor of heat, and a bad conductor of electricity. The existing material serves that task better than aluminium. The other reason is that there is a special packaging material on the inside of the pack, which facilitates heat removal. That material can only be done on the existing casing material as of now. But Nishant and company are in talks with various companies to develop a material which can be applied on any casing material. Another thing that gets powder coated is the bar end weights. The end weights are coated in gray/black finish. There is a battery pack housing, which has got square cutouts - basically for ventilation.
The chassis is supplied by Indian vendors. They are looking at Hyderabad suppliers - but there aren’t too many fabricators in the country with experience in chassis manufacture. PURE believes in building long term relationships with its vendors, so that all can benefit from learning curves. Apart from the chassis, motor controllers and shock absorbers are indigenisation WIP. There are other Indian vendors for the motor-controller and shock absorbers which are under testing The ladies side stand and a bottom plate below the battery area is welded at the first station. Since the battery casing is different for the high speed and low speed models, the battery pack housing’s welding is also done at the PURE plant.. Incidentally, the line manufactures either high or low speed vehicles in a day - mixing does not happen, as a lot of parts can get interchanged in that case. There is a spray painting operation after this.
The chassis then goes for fork, and rear tyre fitting. Currently there is a team of operators who move around doing the fitting. Was heartening to see dealer service trainees being an integral part of this stage. All trainees have to spend 3 months at the factory - and they end up learning a lot about the scooters. Nishant joked with me that the dealer technicians have access to those areas of the plant, that the company does not allow its dealers to enter. I suggested to Shahrukh that they can have two C beams and manually pushed trolleys on which the frames are placed. This will improve productivity - at relatively low cost. After this stage, the chassis moves on to the assembly line. There is a single belt with about 11 stations. TIme per station is around 4 minutes. The factory does take safety seriously - was given safety shoes to wear inside the assembly area.
In my younger days, my mom would always get a complementary baptism done on all the utensils she purchased. Every shop had the vibrating drill bit equipped pen, which the shopkeeper would use his calligraphy for inscribing the family name. After the shocker and wheel fitting is done, at the next station, the Vehicle Identification number is inscribed onto the chassis, using an automated machine which does the job the same way that the utensil sellers used to do.
There are a few stations which supply the assembly line with sub-assemblies like console, harness etc. One of these stations is an electronics testing area. Current sampling rate is about 1 in 3 for items like motor controllers and harnesses. But for parts where there are current QA issues, 100% sampling is done. (That was the case with the DC/DC converter, when our trip was happening. There is a new Indian vendor who has started supplying the converter recently.) One of the good things about PURE EV is their patience with vendors. They genuinely work in partnership mode with their vendors to resolve quality issues.
The ratio of QA to production operators at the assembly line is 1:2. I think it would be better if this ratio becomes 1:10. Self inspection is something that has to be built into the system. And also a Toyota 5 Why approach to problem solving - so that the defects get removed at the design stage itself. One candidate for a 5 Why analysis is the fork cone bearing of the EPluto 7G. Field failures started getting reported on the same. The bearing design today is such that the bearing is just at the mudguard level. So there is a lot of dust and water ingress into the bearing. The temporary solution has been to add a rubber cover to the mudguard inside - but the 5 Why approach indicates that the fork needs to be redesigned to shift the bearing above the mudguard area. Btw, this has been done in the ETrance Neo design, where such failures are not being reported.
We come to the end of the line now. The final QA team test rides each vehicle for 2 km before it goes for delivery. PURE is looking at buying a vehicle dynamometer to make their task easier. I have passed on Ravi Bendre’s number at Dynalec, who may be able to help. I asked the final assembly team about the typical issues that they report during the test. Here is the list - along with root causes.
Vehicle pulling to one side: there is a mix up on fork collars. Etrance collar used in place of 7G. One solution is to have the same color of electroplating for each model, so that there is a simple visual cue about inappropriate parts. The better solution is the one that I talk about in the vehicle top speed point.
Brake Noise: This usually comes because of the rear drum brakes. This could be because of dust in the drum. Or oversized brake shoes. Once indigenisation is done, pre delivery inspection should be done by the vendor. Shoe and drum diameters can be measured and sorted into different bins. Oversized shoes should be paired with oversized drums and ditto for undersized.
Vehicle top speed not achieved. This depends on the road profile and the gradients/ slopes and also on the weight of the driver. . One kaizen that the company has adopted is that on a single day, either high speeds or low speed models are made. So the chances of mixing go down. I am not too happy with this practice. I would want a flexible assembly line. As the number of models go up, and customer customisation options increase, the chances of mixing will increase further. When I was visiting the Dell server plant in Austin, I found an interesting practice, which can be replicated at Pure EV. Model order data is fed into the server. All this is linked to a bar code. Part bins are located in front of a conveyor. The operator scans the order barcode. There are lights above each part bin. Based on the order, the appropriate part bin lights come on. The operator only has to pick up the parts from the lighted bins and put them into an assembly tray. This tray is kept beside the chassis - and moves along with the chassis on the assembly line. This system will ensure that mismatches don’t happen. Currently the final assembly QA team is observing about 2-3 faults per vehicle. This needs to go down to PPM level. This can only happen with a focus on process and design changes.
Each vehicle comes equipped with 4 keys and 2 remotes. That’s 4 too many. Most riders have limited trouser pocket space shortages. So they will only end up carrying only a single key. My strong suggestion is to sell the remote as an accessory. Let the dealer make some extra money on that. And 2 keys are more than enough. There are enough key makers around who can provide duplicates in case the user misplaces one of the keys. Another suggestion for dealer options is the flat Activa kind of seat. For taller riders need to sit away from the handlebar to get posture right. The current contoured seat is good for people who have a height upto 5 ft 5 in. But anything beyond that means trouble. The flat Activa seat will take care of that.
We then moved on to the battery area, where Nishant ji himself took us around. I asked Nishant about why not LFP. His basic problem with LFP is their inability to handle fast discharge rates. NMC can do a 3C discharge, but LFP cannot. Battery production is JIT, with only 1-2 days of inventory of battery packs in the system. The individual cells are first checked and a cell characterisation is done. 12 hours of charging and 12 hours of discharging. The characteristics of each individual cell is stored in a database, Nishant talked about DCIR, which is also used..
The cell characterisation is a bottleneck process at the plant and happens 24 X 7. There are 4 fundamental parameters - alpha, beta, gamma, theta- and 3 derived parameters that are recorded at this stage. The cells are then put into one of the many compartments , based on their performance on two of the most important parameters - alpha and beta. You can consider each compartment as a single cell of a 13 by 13 matrix.
The cells are then put into a welding jig, where the bus-bar terminals are joined. (The company will be moving on to laser welding soon.). The earlier bus bar material had an excellent weldability but the electrical conduction was not as good as the existing customized alloy bus-bar There is a separator plate between the two halves of the packs - I guess more for structural support. Also made of dielectric material. There is a no metal bolts policy inside the pack. The super small BMS is mounted using a sticking material which does not melt at even 200 degC - The assembled packs then go for testing. Again for 12 hours. This operation is also carried on 24 X 7.
There are X number of hotspots that have been identified by repeated field failure analysis. Hot spots cause a dip in alpha and an increase in beta . So it is important to reduce them as much as possible. These hotspot locations are treated with special advanced materials for heat management. At some places special composite materials are installed for heat management. The cell assembly is then inserted into the pack - along with the thermal management advanced material- or magic sauce - as Nishant likes to call it. He says that this material is such that it will allow cell level repairs later on. He showed us small containers for this material which will be supplied to the dealers so that they can do cell level repairs at their end. We discussed the 3 pin battery connectors - which I think can become an Achilles heel for this otherwise lovely battery. Nishant told me that they are considering changing over to higher rating connectors. My own recommendation would be to use Lotes connectors instead - since they also have a provision for Can bus. Later on with an improved SoC prediction in the BMS, communication between the instrument cluster console and the battery can happen through this CAN bus.
A few words about failure analysis. Battery health is very much like human health. It cannot boil down to just two parameters of food and exercise. Nishant likes to believe that the cell is more a mechanical project than an electrical one. You have the anode, the cathode and the electrolytes, but it is not just these elements which determine cell health. How they interact with each other, their environment is as important as the materials science that goes behind building them. Like with the human body, cells can also get affected by cancer. Most times, battery pack designers adopt a black box approach to this cancer. Battery dead - replace battery. At times, the battery designers will come to a conclusion that this is stage 4 cancer - there is nothing much we can do about it. But, the trick is to be able to link lifestyle to cancer. In the same way, parameters like mechanical pressure and temperature are the lifestyle that needs to be explored for batteries. High temperature is the enemy for cell chemistry. There are a lot of reactions happening all the time inside a cell. Most are reversible and exothermic. Some are irreversible. It is these irreversible reactions which cause cell degradation. And the rate of these reactions is determined by cell internal pressure and temperature. Nishant takes the help of CSIR labs to understand these correlations. Experiments are being done with liquid cooling, but the final decision will depend on the weight and cost of these thermal management systemsPredicting how these reactions happen is a computing intensive job. IIT H’s 650 teraflop machine is used to simulate cell chemistry. For the layman, this supercomputer has 100,000 times the computing power of your normal laptop. The packs that fail are got back and sent to IITH labs. Various electrochemical testing methods are employed to check the cell behaviour. . And based on this understanding of cell limitations, the BMS settings are reformulated for alpha , beta, gamma settings. And the material properties of connectors and interconnectors are tinkered around with. In this whole process the vendor as a partner philosophy helps. Because each cell manufacturer has different quirks in their cell. So Pure’s customisation is being done at the manufacturer level. They have had the same supplier for the last 3 years.
We discussed the absence of telematics in the packs. Nishant was of the view that real time telematics data will only give you electrical parameters. And failures happen because of mechanical parameters. The company is confident that its packs will easily last for 1200 cycles without much degradation . (The lab tests indicate 1500 cycles.) The degradation chart is as follows:
For the first 10 cycles, capacity is 1% above rated
For 50-600 cycles, the capacity falls by about X%, in a more or less linear fashion
For 600-1200 cycles, the capacity falls by about 2.5 to 3X but in a non-linear fashion
Another post analysis improvement has been in reduced alpha fluctuations in discharge. So speed does not fall down as much as it used to earlier. And for the ETryst, it gives a range of 100 km, even when you are doing a steady 55 kmph and the motor is drawing 2 kW power.
Had a small session with the service team. We did a Q and A - and must admire the guys for their enthusiasm. Have told them about the super hero role that they will be playing in the years to come. When battery pack replacements start happening, 1/3rd of PURE's revenue will be driven by service. But for that sale to happen - they need to ensure customer delight with dealer service. Even if that is not a major revenue account for the dealer. Pure adopts a proactive approach in service. There was a significant update in the BMS recently - and the company decided to actually retrofit existing vehicles with the new BMS. This was not a recall - and though the company could have made some song and dance about this - they went about doing it in their own quiet way. Another innovation that is going to help in battery life management is their Battrix Faraday device. This device hooks up to the battery and is able to do cell level repairs, without having to open up the battery. We saw this device being used for running diagnostics on the new 3.5 kWh batteries that will go into the ETryst. The plan is to have these devices present at dealer locations. And have dealers run the vehicle batteries through this at regular intervals. This may also have an advantage of generating a much needed dealer recurring income. The company is also planning to train the dealer employed service technicians to repair motors, controllers and chargers at dealer level. It could be a simple fuse of MOSFET which could have blown up. Having the dealer trained to tackle these repairs can mean faster turnaround times. And also reduced costs. The current practice is to just sell a new charger to the customer.
Spent some time with the social media team. Young team - about 5 people. They did know about pluginindia. They are spending money on Google Ad words, FB and Instagram. Also some SEO stuff. Advised them to work more on YouTube and WhatsApp - especially in vernacular media. Today the team is only working with English, Hindi and Telugu. Tamil content should be a high priority, as the dealers there are doing good sales. The team is generating about 150 leads a day - which are being sent to appropriate dealers. They did not have any data about how many of these leads convert to sales. This can be done by simply matching a list of customer phone numbers with lead data. This exercise will also help the team realise which media is delivering the best results, in terms of sales, and not leads. I think PII can definitely contribute to mentoring this team for improved productivity.
Ended with a chat with Rohit. The company has raised 25 CR in its first round of funding. They are looking at raising 200 CR in the second round. An investment banker has been hired already. Due diligence was going on when we visited. Insha Allah, there should be a lot of good work that will happen when fresh funds come in. PURE is a financially conservative company. They have hit the sweet spot in pricing. The products are definitely VFM - and as users realise the power of the batteries - one can expect a hyper-loyal set of customers and dealers. The ETryst alone has the potential to accelerate the company to a revenue of 10,000 crore in the next 5 years