REVA, the electric passenger car, does away with diesel and petrol engines and hence has the potential to reduce emission levels in the city, cut out smog and also congestion. Chetan Maini, Managing Director of REVA Electric Car Co., is very enthusiastic when he talks about his electric passenger car. His thrill is in starting from scratch on a concept and developing a car, which people can drive to work, or to the shopping mall.

Those who manufacture and market imported concepts usually miss out this joy. For them the strategic decisions are limited to finding the price segment to slot their product, and to choosing between Shahrukh khan and Amitabh Bachchan as brand ambassador. It is not that electric vehicles have not existed on Indian roads. There have been a few experiments in some cities to run mini buses on batteries. But it is another ball game to develop aesthetically designed car, which customers would buy to meet their personal commuting needs. It has been a year since this car hit the streets - first, in its city of birth - Bangalore, and later, at a few other centres. The most recent launch was at Chennai. The small vehicle has high manoeuvrability in the city. It's synthetic body can take a good amount of urban shoulder jostling without scratching and denting.

Its price, however, is the damper. The standard model will cost around Rs 3.06 lakh on the road (Chennai price), and the Classe model Rs 3.40 lakh. The cost of the base model itself is close to that of a Maruti 800. A customer thinking of buying REVA as his only car has to accept a few compromising on the vigour of a petrol engine, he would have to give up dreams of going on out of city travels. Moreover, REVA is hardly a family vehicle. It is little more than a scooter, with its ability to seat only two comfortably. The back seat is more of a myth than a reality. At best it can be used as a space for holding your shopping bags. These realities have shown in the customer profile of the vehicle during the last one year. About 80 percent of those who have bought REVA have done it as a second car. The critical point is how much would the first-time customer pay for the vehicle, considering the compromises that he would need to make from the utility point of view. A quick informal survey during the chennai launch showed that this price would be between Rs 1.5 lakh and Rs 2 lakh. For REVA the ultimate price at which the car reaches the customer can make or break the product. This small vehicle is the first point in a transition to new technology.

Its price will play a significant role in deciding whether the dream of this transition will come through. Though alternative energy products such as solar lanterns, solar cookers, biogas plants, wind turbines have been introduced in the country earlier, these have come in as a part of programmes supported by the Union Ministry of Non-Conventional Energy Sources (MNES). REVA is perhaps the first product to enter the market on its own strength. Support from MNES was limited to the pre-launch testing of the vehicle. Products like REVA face a rather peculiar situation.

The manufacturer has to amortise the development costs and so the initial units have a high price. At that price the customer does not consider the vehicle value-for-money. There will always be those who buy the vehicle as a novelty, or as a second car. But these customer alone cannot help the car meet the larger environmental and social objectives. Since the car does away with diesel and petrol engines, it has the potential to reduce emission levels in the city, city out smog and also congestion.

But for this to happen, there has to be sufficiently large number of vehicles on the city streets. And for that to happen the car has to be able to be affordable to a larger number of people. Even if one were to dialectically question the projected environmental benefit by saying that the electric car only moves the pollution load from the cities to the power plants, its environmental footprint will turn out to be smaller than that of conventional vehicles.

Travelling 80 km on a charge of about nine units, REVA is more efficient than the other cars on the road. And carrying out pollution control and abatement measures at centralised power plants is far more easier than doing it with decentralised sources like cars. Though the vehicle is owned individually its positive environmental impact is societal if it replaces sufficient number of conventional vehicles in city centres. So it requires a larger support from the society and the government to break the price conundrum. The next logical question, then, is it worthwhile for the government and the society to support this project through tax waivers and soft loans. The answer should be affirmative, since it is the technology for the future. It signifies the next quantum from the internal combustion engine, for which the clock has already started ticking. At present, REVA's batteries have to be charged form a power point at home or office, but may be in future this company, or some other, will design cars in which the batteries can be charged by solar panels.

Or may be fuel cells. Even at present these ideas are not fantasies, and certainly they could be realities sooner than later. There is no reason to argue that we let the technology be developed first in the West and later we can get it from them. Transfer of technology is never, ever cheap. Waiting for technology to be transferred from the developed countries is losing the opportunity costs. For any society the alternate fuel technologies can have two drivers. One is the cost of conventional fuel. Two is the development cost of the new technology.

The impetus to work on alternate fuels will come only if the conventional fuel starts becoming dearer. Whatever be the global policies on oil supply and pricing, India's position is always going to be on the worse side because of the heavy reliance on imports. The development cost of a technology is always the highest when the transition is being made from one quantum to another. REVA has taken the brunt of these costs. So if the society designs some ways to cushion these costs, then future growth can be from the shoulders of this small car.

- S. Gopikrishna Warrier