9th July 2020

All Electric Future #1 – Akhil Aryan feat. Shreyas Shibulal (Micelio Mobility)

Introduction

In a recent interaction, Akhil sat down with Shreyas, the founder of Micelio, to talk about the impact of COVID and get to know what he thinks of the future of electric mobility in India.

Micelio’s mission is to power innovation and drive long-term, sustainable change in the clean mobility space. ION Energy & Micelio are currently working on a couple of projects together.

Here's the transcript of their conversation:

Akhil Aryan: Thanks for taking the time out and coming on this call. I want to start by asking: Where does the name Micelio come from, and can you share what you’re trying to do in the EV space?

Shreyas Shibulal: Micelio is Spanish or Italian for mycelium, which is like the underlying geometry of any ecosystem found in nature. We found significant meaning in the name because we see Micelio as an ecosystem player more than anything else. Broadly, the four things that we do is:

  1. We have a seed-stage fund for startups working on technologies in the EV and autonomous driving space.
  2. Micelio discovery studio, which is a hardware accelerator or part development space that startups come and use. The idea was to kind of reduce the barrier to entry for startups. We have a lot of equipment there which smaller startups can’t necessarily afford to buy out on their own.
  3. Lightning Logistics, which is a last-mile logistics provider running on a 100% electric fleet and, 
  4. We’re also developing our own electric vehicle form factor for last-mile logistics

Akhil: That’s awesome! I think across the board that covers every single point in the ecosystem. Concerning COVID-19 and the lockdown, has it affected Lightning Logistics or your product development in general? What’s the current status of operations at Micelio?

Shreyas: The impact of COVID-19 has, in some way or another, affected all four business verticals of Micelio. Starting with the fund, the venture capital space is slightly morphed right now, especially at the seed stage level. For many companies, it’s become even more urgent to look for their next round of funding and secure that capital to maintain their runway.

With the Micelio Discovery studio, it’s supposed to be a space where people from multiple organizations can work together. We haven’t been able to operate the studio during the lockdown, but now we’re thinking about how we can slowly open it back up after adhering to the social-distancing guidelines.

With Lightning logistics, I think we were not alone with the initial struggles that many other last-mile logistics providers also had to face. Initially, it was a challenge as many cities had introduced a pass-system, and we had to get acquainted with their policy framework while figuring out a way to navigate through that. We were also trying to figure out how to keep our delivery executives safe. Obviously, safety comes first, and there was a lot of fear as our delivery executives were risking their lives by going around and making these deliveries. In the initial days, it took some time to address those fears. However, as the weeks went on, we found our footing. Eventually, we were able to address the increase in demand.

On the product development front, we are able to make good use of our time, especially from the documentation standpoint. There were a few things that were stalling, such as testing, which was something that we couldn’t do for a while. But now, with the unlock slowly happening, we’re able to make some headway on that front.

Akhil: At an industry level, what do you think is the impact of COVID going to look like for the EV industry? For India, EVs are quite nascent in their journey and don’t have a significant market share. And with the dependence that many battery pack makers in India have on Chinese cells and Chinese suppliers, there’s going to be a need to localize the supply chain. How do you see the demand for EVs and the sentiment of building self-reliance within the country for the supply chain happening over the next couple of years?

Shreyas: The question of demand is consumer-driven, and that’s going to depend vastly on how COVID-19 is going to impact consumer behavior. My intuition would be that there will be an increased demand for private vehicles in general. For EVs, in particular, it’s hard to predict how the demand is going to be impacted by the pandemic.

For the first couple of weeks of the lockdown, people talked about how greener the cities have become. Lesser number of vehicles on the road caused a significant drop in air pollution. I can’t speak for everyone else, but I certainly care about making our city green and an enjoyable place to live. If that sentiment continues, we could see more people adopting EVs.

On another note, China controls a significant portion of the market for lithium-ion cells. As a country, if we cannot locally source those components or materials, it’s always a good idea to at least diversify that supply chain.

However, on the localization front, there have been exciting research projects at the university level experimenting with different battery chemistries, which could be locally manufactured. It’s well established that manufacturing an internal combustion vehicle is more labor-intensive. If there’s a very significant increase in demand for vehicles in general, the more efficient way to do that is to increase the supply of electric vehicles.

Akhil Aryan: Apart from consumer-driven demand, e-commerce space is going to be significant in the next couple of years as people may not necessarily want to go out and buy something rather than probably order it in. Given that, Micelio has significant exposure to last-mile logistics and commercial usage of electric vehicles, how do you see this space evolve in the next couple of months and the future?

Shreyas: If you look at the space that we’re in, last-mile logistics, the pandemic is already affecting consumer behavior to the extent where there’s been an increased demand for doorstep delivery. That will probably continue, and to address that need, we need more electric vehicles. When you’re operating at that scale with large fleets of 10,000 vehicles, the operational cost is going to become very important. That’s where EVs have a clear upper hand.

There are just a few things that we have to figure out on the EV front: how the asset depreciates, the residual value, and the financing, which is another thing that we still haven’t cracked. Eventually, that clarity will come and there are some clear advantages at the unit economics level that make electric vehicles an obvious choice for a B2B fleet context.

Akhil: I agree, and I think that’s probably the reason you’re investing in building your design or your own product because you can optimize it for the use case of commercial last-mile connectivity. Is that the primary motivation behind designing your own product?

Shreyas: Yeah, we wanted to build something purpose-built for last-mile logistics operation and address some of the issues with the reliability and longevity of the product itself. The electric vehicles that we have currently have been sourced from multiple OEMs in India. However, they weren’t built for last-mile logistics or used 24X7 like the way we are using them now. We faced certain challenges with its reliability, and that’s the idea behind developing our last-mile logistics form factor.

Akhil: What’s the coolest tech that you think we’re going to see in India, say in the next three to five years, in the context of EVs?

Shreyas: For me, anything that can be localized with raw materials that you can locally source, would be classified as cool technology. People are working on indigenous motor and battery cell technology, which are cheap and can use raw materials that are readily available while performing better than lithium-ion batteries.

I’m looking forward to those kinds of breakthroughs. In the context of EVs, aerial drones are a little less conventional, but I’m looking forward to some policy framework on that front that will allow us to take that forward.

Akhil: I agree, being able to localize these new technologies and use sustainable materials, as long as they deliver on performance while reducing dependency on other countries, could have a substantial positive impact on the industry.
My last question to you – at ION, we have a mission to accelerate the transition to an all-electric future. And I like to ask people who are on a similar path, what does this all-electric future look like for them?

Shreyas: When I think about the all-electric future, I believe that it’s going to happen eventually, but it’s not going to happen all at once. The different segments of mobility are going to transition into this space in phases. I think the first kind of adopters are going to be B2B fleets and large commercial fleets. And that’s the reason that we’re focused on last-mile logistics.

Before the pandemic, I always thought that private vehicles were probably one of the most challenging segments to 100% completely transition to all-electric. However, now I believe it may happen sooner than we think.

To answer your questions, what does the all-electric future look like to me? No Petrol Pumps! I think that’s a visible indication of the all-electric future.

Akhil: Yeah, that’s a powerful one. Just being able to picture a world with no gas stations, no petrol pumps, is a strong indication of an electric future. Across the board, this was a solid conversation, and I enjoyed speaking with you. You’re doing some fantastic things in the EV ecosystem, and I’m excited that we have an opportunity of working together on some of the projects with you. Thanks for taking the time today to speak with me, and let’s stay in touch!

About All Electric Future

In this video series, we chat with industry leaders in the Electric Mobility and Energy Storage space to understand how their business plays a crucial role in strengthening the industry, the impact of the lockdown, and how they are challenging the pandemic with their all-electric dream.

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