Matter is a technology start-up set-up by Mohal Lalbhai, a scion of the Lalbhai Group from Gujarat know more for their textile empire. Founded in January 2019, Matter is a two-year old start-up that seeks to introduce frugal and innovative solutions in the energy storage space which would include batteries for mobility applications, stationary applications, energy distribution solutions as well as renewable energy solutions. Designed for India, we speak to the firm’s founder on just how it’s all coming together.
Q. Give us your view on the EV transition in India? Is it moving fast enough, or is it too slower than it needs to be?
In India, the electric vehicle market is constantly growing. However, I believe we need to shift our focus away from what is now in play and instead focus on anticipating market changes and innovating to provide what the customers need. Policy support, charging infrastructure, education and awareness are some of the key factors that will help accelerate EV adoption. Further, for EVs to find a place in our cities, tackling awareness at the individual level is of paramount importance. Policymakers can play a critical role in spreading awareness and they must develop partnerships and collaborations with stakeholders in the EV ecosystem to reach a larger audience. The Delhi government’s “Switch Electric” campaign, which aims to alleviate consumer concerns and raise knowledge of EVs, is a good example of this. As the government steps up and supports in creating a robust infrastructure for energy supply for EVs, this will only help build a positive attitude towards adoption of EVs as a preferred mode of transportation. So, while the transformation may take time, I believe India’s mobility revolution is significant. The targeted and systemic policy assistance as well as adjustments in market architecture, business models, and financial structuring that we are seeing now are only going to add more fuel to the revolution. An electric future is nearer than we think.
Q. In India, along with the shift to EV’s, we see a simultaneous move to say, blend ethanol with petrol, or build up thousands of CBG (Compressed Bio gas) plants to use in transportation again. How do you see all these coexisting and being sustainable in the long term beyond , say 2030?
India’s automobile industry is the world’s third-largest emitter of greenhouse gases (GHGs), accounting for 14% of global CO2 emissions from energy. These emissions have more than tripled since 1990, and they are predicted to continue to rise when India’s urban population doubles by 2050. As environmental concerns grow in popularity, India has set ambitious goals by 2030 under the Paris agreement to reduce its carbon footprint and build a greener environment by promoting alternative energy/fuels, renewable energy, and cleaner fuels. Technology, I believe, will be at the forefront of finding these solutions. These alternatives should be implemented and each one has potential benefits as well as challenges to overcome Given the market size and the ambitious targets set as per the Paris agreement, I believe that we will see the rise of new and alternative technologies in the automotive space. This is also relevant as the transition to a cleaner way of moving goods and people will happen at different times in different segments. For example, long haul commercial vehicles may be the last ones to transition to electric vehicles. However, a transition to other modes of fuel may be much easier for these vehicles.
Recently, the government has stepped up its efforts to achieve a 20% ethanol-to-petrol ratio by 2025. When it comes to CBG, as described in the SATAT project, it has also become a valuable component in India’s shift towards greener fuels. The developments in the automotive fuel field are happening at a very fast pace and are the need of the hour. What is certain is that in the future, greener technology will emerge.
Thus, I see various technologies coexisting and driving the country towards green mobility in the near future. Just as CNG and petrol/diesel cars are co-existing right now, I think Bio-gas and Ethanol-petrol fuel blend vehicles shall co-exist the same way. However, these technologies only reduce the emissions as compared to conventional fuels. Thus, EVs would still play a major role in reducing pollution from vehicle exhaust. Further with better charging infrastructure, more advanced and high-range battery packs, electric vehicles will definitely give other technologies a run for their money.
Q. Can you explain your tech platform with a use case example?
We are an organisation founded on the tenets of technology and innovation with a vision to revolutionise the electric ecosystem within India. Even as technology megatrends like autonomous systems and electrification are redefining the benchmarks of industry, Matter has developed an integrated technology stack that has tremendous potential to make a disruptive impact on the electric ecosystem. Realizing the different needs of our customers, we have branched out into two separate business lines- first one is Matter Energy, an integrated energy solutions company and the second is Matter Mobility which focuses on electric two wheelers. Matter Energy will be our first offering which is poised to enter the market in September – 2021.
On the whole, our products are backed by extensive testing and validation and are being developed completely from scratch keeping the expectation of Indian customers in mind and considering the Indian weather conditions. Our aim is to offer robust products to our customers and in process create value for them. Applications of the Matter Technology platform span across the electric energy ecosystem, ranging from energy distribution to energy consumption products that include energy storage solutions, an EV propulsion platform as well as mobility platforms such as electric vehicles (EVs).
Q. At Matter energy, do you see a core chemistry like say, Lithium ion dominating the battery space, and your own attention for the foreseeable future? Or are you chemistry agnostic?
What I see happening now in battery technology is explosive growth, in India and other markets as well. We need to think ahead and I’m also bullish on the growth of new technologies and newer cell chemistries. Very recently researchers at IIT Bombay have developed a LithiumSulphur (Li-S) battery with thrice the energy efficiency and cost effectiveness, and four times the range as compared to conventional lithium-ion batteries. It is fascinating to learn that new and enhanced electrolytic solvents are being continuously introduced. Upcoming solid-state battery is also a promising candidate for nextgeneration battery technology. But it will take time before these battery technologies find their way into the market At Matter Energy, one of our core values is to provide technologically advanced and sustainable energy solutions to our customers. Our product platforms are agnostic to the battery technologies and can be adapted to newer chemistries as well. So while we are currently focussed on the Lithium ion batteries, we are also open to exploring new technology if it helps us in providing better products to our customers.
Q. What are the biggest risks you see for an orderly transition to EV’s in India and beyond? How long will the sector require subsidy support?
Yes, we haven’t really seen huge uptake in the adoption of electric vehicles as a mainstream product in India. And that is troubling at best, but when we look through the mirror, we realize that there are a lot of gaps in terms of the customer requirements and the current product positioning. At present the Indian customers do not have a good value proposition to shift away from petrol. Moreover, I believe that the major hurdle for electric vehicles will be to provide an improved experience to the customers over that of a conventional vehicle. Thus, for an effective transition to EVs, the products can’t be offered just as a replacement for the conventional vehicle. This is an area where the manufacturers need to think long term. We need to see better quality products which are designed and developed for the Indian customer. So in that sense I see that there are many start-ups who have entered this space and are offering products which are only assembled by them. These products are selling at a lower price and are also eligible for subsidies. However, these products also have a huge potential to play a deterrent for the EV adoption, since they have not undergone the rigorous testing and validation and are bound to underperform. This can add to the existing anxiety among the customers with regards to EV.
Another important factor to consider will be the policy measures from the government. Current policies by the central and the state government are playing an important role in the EV adoption. However, it is important to have a consistency in such policy measures across the country and over time. I believe subsidies are important for creating the pull from the consumer and encouraging the manufacturers to invest in developing the EV ecosystem. It is difficult to comment on how long this support will be needed as it depends on multiple factors such as adoption rates of EVs, evolution of new technologies, cost of the battery and pace of EV infrastructure development to name a few. However, I believe that the industry will need subsidy support till the EV population reaches a critical mass and the battery prices come down to around $70/ kWh from the current rates of over $150/ kWh.
Q. Your site and reports also cite a strong plan for storage applications across products, including distributed solar products. How do you see the market potential there? Will you approach it with a different distribution strategy?
Yes, I believe that there is a strong potential for energy solutions in the stationary application. As per the India Energy outlook report 2021, India’s clean energy contribution/ renewable capacity contribution is expected to grow to 450 GWh by 2030. With the increased focus on clean energies such as solar and wind, we believe that the demand for the energy storage applications will also see an increased uptake. We will start our operations in August and stationary applications will be one of the key focus areas for us. Our solutions will be available in a range of stationary applications such as industrial & home UPS, solar inverter, and telecom. We are looking at the distribution strategy from the B2B perspective. Thus, distribution strategy and entire support system will be attuned to provide a superior product and service solution to our customers based on the specific requirements.
Q. On the bikes front, we see an ambitious plan to manufacture 60,000 bikes per annum initially. Where are we on the key dates for that? As a newcomer to the segment, are you considering any new approaches to your marketing and distribution?
Matter aims to occupy a space wherein we will offer mobility products that are engineered from a deep understanding of the specific needs of Indian customers at a competitive price. We should be ready with our under development vehicle in early 2022 and would be happy to share more information closer to the launch. As far as the reach of our product is concerned, we will be looking at a potential customer base across India. There are different approaches being considered for the marketing and the distribution strategy of the product. We are also working on an omnichannel sales strategy and look forward to working with partners who not only share our passion but also our vision of driving India to a sustainable future. However, we will be glad to share the details once we are ready with the product.
Q. How do you plan to support potential customers when it comes to charging?
We believe that the development of charging infrastructure is important for faster EV adoption. However, the way it is being projected as a make-orbreak deal for owning an EV is misleading. When it comes to two-wheelers, which have energy demands up to 5 kilowatts, a 5-amp plug can charge them in around six hours. Even a 5-kilowatt-hour battery could be charged from zero to 100 percent in two hours using a 15-amp outlet. As a result, a convenient, economical, and simple system is what is required when it comes to charging two wheelers. These solutions are already available at every small and large shops in our cities. I agree that there is a need to devise a solution for monetization of these solutions. However, education and awareness can play a larger role in alleviating the anxieties related to the charging infrastructure availability. We are working on offering a solution to our customers that is easy to use and offer a great experience, so different charging solutions are under consideration at the moment considering our product portfolio and future plans. Battery swapping is another option that we will be offering at some point in the future and that is where for us Matter Energy and Matter Mobility come together in terms of setting the entire battery swapping infrastructure and supporting our EV products.
Q. Is there a ballpark revenue number you see for your firm, by 2025?
We want to make Matter a potent harbinger of change in this ecosystem by offering not one, not two but many different products and solutions that address pain-points on the one hand and accelerate the use of electric technologies on the other. Matter’s team has set internal targets of reaching a US$ 1Bn top line by 2025