Why Shreyas Shibulal is betting big on electric vehicles in India

In January 2019, Shreyas Shibulal, son of Infosys co-founder SD Shibulal, set up Bengaluru-based investment fund ‘Micelio’ for investing in electric vehicles. 

The fund, which has a corpus of Rs 140 crore, and targets startups primarily in the electric vehicle space, was set up using Shreyas’ personal wealth.

Over the last four months, apart from setting up Micelio and getting it running, Shreyas and his team have also worked towards building a studio that offers different design ideas for EV solutions.

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Electric vehicles had captured Shreyas’ imagination in his college days, and he even built a car as part of an academic project. After graduating from the University of Pennsylvania, he briefly interned at Tesla – the world’s largest EV automaker – which inspired him to do something similar in India.

EVs are a necessity, especially due to rising crude oil prices, believes Shreyas, and Micelio is his vehicle to achieve this in India. With Micelio, the idea is to create and build an ecosystem that can nurture existing talent in the EV space, along with ecosystem players.

In the same vein, Shreyas recently launched Lightning Logistics, an electric vehicle-related B2B delivery firm that provides customers intelligent, data-driven logistical solutions.

Edited excerpts of the interaction: 

YourStory (YS): Tell us about Micelio and your vision for the fund.

Shreyas Shibulal (SS): Micelio was founded with the vision to be an enabler of innovations in clean energy, and to create a sustainable shared mobility ecosystem with a strong EV focus. The idea was to build things that can have a long-term social impact, and this reflects in Micelio’s culture as well.

Take the very name of our company, for example, ‘Micelio’ is a part of the organism that feeds an ecosystem while growing itself. 

At Micelio, we focus on nurturing the Electric Vehicle (EV) ecosystem by acting as a catalyst for disruptive electric mobility solutions with a clear social impact. It is probably India’s first seed fund with a vision to enable innovation in clean energy, and create a sustainable mobility ecosystem.

Micelio’s investment philosophy is to employ patient capital to grow companies and build a community that is focused on EVs to promote clean mobility.

There are two aspects to Micelio.

• One where the focus is towards strengthening the future of e-mobility by building a clean mobility ecosystem in India through the Micelio Fund and Micelio Discovery Lab, which focuses on design ideas. 
• Second is on the commercial side, which focusses on the current EV ecosystem to get a deeper understanding of what the industry needs through Lightning Logistics and a Product company.

YS: What does Lightning Logistics do?

SS: We wanted to get a deeper understanding of the industry needs within the current EV ecosystem, especially in the last-mile delivery space. This is where the idea of an intelligent EV fleet that would run pilots to understand last-mile connectivity, germinated, and eventually took shape in the form of Lightning Logistics. 

As of now, we have a fleet of 1,000 EVs operational in three cities (Bengaluru, Hyderabad, and Chennai), across various verticals such as e-commerce, grocery delivery, and courier services.

We’ve hired drivers – called ‘Driver Captains’ – and trained them to use e-bikes without any hassles.

Using smart data and intelligence analytics, we’re able to deliver service that is cleaner, faster, and reliable. 

We also have battery storage stations and charging points to ensure continuous charge availability for our e-bikes.

YS: Why was Lightning Logistics started?

SS: Our country faces an unsolved challenge in the logistics sector, especially when it comes to effective movement of goods across the country. This places an unprecedented economic burden on India and its ability to improve its growth prospects.

Therefore, Lightning Logistics was started as a ‘one-stop solution for India’s logistical needs’, contributing to its economic growth, job creation and building an efficient system of logistical transport. 

YS: What does Lightning Logistics hope to achieve, and how do you see it growing?

SS: As a brand, we’re committed to solving India’s last-mile logistics connectivity issues. Lightning Logistics is an innovative, technology-driven brand with a solution-centric approach. Our service, backed by technology, training and our data ensures reliable, along with on-time delivery. 

The company, as a logistics partner with its all-EV fleet, helps organisations gain carbon credits and improve their eco-responsibility. We are currently in the pilot stage in three cities, and have four major clients. Here, the riders and scooters are working for clients gathering a host of data/insights that we can give back to the clients. 

We are utilising data from two perspectives – machine elements of data giving information like battery temperature, speed, voltage, and ampere. Then there is a people dynamics of data, for eg: when has a driver checked in, where is he presently, how much cash is the driver carrying, which bike should a rider use, etc. Both, combined, help the customer. 

The riders are also currently using an app designed by us.

In the last 10 to 15 years, the delivery has been about taking goods from point A to point B. At Lightning Logistics, we will be using data to make the delivery process more efficient – from an internal efficiency perspective, as well as an external client-facing efficiency perspective.  

Client facing efficiency has two sides to it – predictability and reliability. We are using data to do all of this on the back-end, and electric vehicles lend themselves to this. 

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YS: Is there an infrastructure in place for the pace of EV adoption that Indian startups, government and consumers are looking at? 

SS: We feel the foundations of the infrastructure are just being built. Different stakeholders are in different stages of maturity.

For example:

• Government has NITI to help think and plan policies and adoption of EVs
• Consumers are looking for knowledge/information on EVs more than actual financing (yes, it's the logical next step...but we haven't reached that tipping point yet).
• Banks are looking to better understand EVs compared to Internal combustion Engines (ICE). They’re contemplating how EV loans make sense, the residual value of EVs, if EVs are a sum of parts, what’s the best way to finance them, etc
• Startups obviously move the fastest to form some clusters (it's a question of survival) - but their challenge is still to compete/retain identity 
• Academic Institutes do take a long-term view and many of them (IIT Madras, for example) have incubated good EV startups
• OEMs (ICE players) are the last to the party – they want to peep but not play – unless there is absolutely no other option.
• Think Tanks could help bring funds from corporates linked to climate change/sustainability – and use it to influence government policy, and understand what ideas can be imported from global experiments

More than infrastructure, I think, we need a framework to help faster adoption. The framework would clarify roles and timelines for each stakeholder above, and at different stages in the framework, a different stakeholder may lead or be a catalyst.

The kindle to the flame is the government policies - but it’s up to to the other stakeholders to take it from there.

YS: Why do you think the future of last-mile delivery will be EV driven?

SS: There are several factors that give EVs an upper hand, especially in the last-mile delivery space. To begin with, it’s because of the economics – lower costs and easier operations.

In India, productivity gain is massive as EVs can help overcome several inefficiencies in last-mile delivery, especially savings on fuel and asset costs.

The initial cost of an ICE vehicle may be lower (for now), but EVs are significantly more economical considering the total cost of ownership over the lifetime of an asset. 

Rising costs of fossil fuels significantly increase the cost of operations with a fossil fuel-driven fleet, whereas the more you use an EV fleet, the more you save, thereby reducing dependence on crude oil.

It’s a simple capex versus opex comparison. While the battery may cost more when you first buy it, over the course of three years (let’s say), it’ll cost you less in electricity costs to charge the vehicle than it would to run the same number of kilometres on petrol or diesel. It will also offset the initial cost of the battery.

Studies show that EVs are already economically viable if usage per day is between 100 kms to 200 kms - an ideal scenario for commercial fleets.

This scenario is even more appealing in an environment where fossil fuel prices are rising and battery technology advancements are driving EV costs lower. 

Moreover, EVs are far less complex and help provide transparency to organisations in terms of reducing hidden costs by using smart tracking features, such as battery optimisation, finding efficient routes, etc, resulting in long term profitability.

YS: What can we expect in the near future?

SS: From the fund perspective, we will continue to look at fostering different parts of the EV ecosystem by investing in a diverse group of startups developing EV technologies. 

In the coming financial year, we are also looking to grow our Lightning Logistics fleet, experiment with different categories of vehicles and establish a diversified client portfolio. We are also progressing well on building an EV formfactor for last-mile delivery.