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FM AMCONSUL CHENNAI
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RUCNCLS/ALL SOUTH AND CENTRALASIA COLLECTIVE
RUEHXQ/ALL EUROPEAN UNION POST COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI 3955
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 CHENNAI 000003 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EINV SENV ETRD PGOV IN
SUBJECT: WORLD LEADER IN ELECTRIC CARS PRODUCES QUIETLY IN 
BANGALORE 
 
¶1. (U) Summary:  The Reva Electric Car Company, producing vehicles 
just outside of Bangalore, lays claim to being the world's leading 
manufacturer of electric cars, with its products driven more than 85 
million kilometers since production began in 2001.  A family-owned 
business, Reva has experienced rapid expansion recently and expects 
to grow even more in coming years.  The company, which already has 
strong ties to the United States, is contemplating a licensing 
agreement with a U.S. firm planning to open a plant near Syracuse, 
New York.  Such an arrangement would mark a new departure in 
U.S.-India economic relations, with the transfer of Indian 
technology leading to creation of jobs in the United States.  End 
Summary. 
 
A visit with Reva 
----------------- 
 
¶2. (U) We visited the Reva Electric Car Company's Bangalore facility 
on December 2 and met with Vice Chairman Chetan Maini, who runs the 
company on a day-to-day basis.  With 3000 of its vehicles already on 
the roads in several countries, he explained that customers have 
driven Reva's cars more than 85 million kilometers to date, making 
it the world's leading manufacturer of electric cars.  Maini 
explained that the company has strong connections to the United 
States, noting that even the name was suggested by former U.S. 
Ambassador to India Frank Wisner.  Maini studied at the University 
of Michigan and Stanford University and said that an initiative 
under President Clinton to find civilian applications for space 
technology was instrumental to the development of the company.  In 
addition, loan reflows generated from a USAID grant provided to the 
GOI supported Reva.  (The USAID/India office has been a proud and 
satisfied owner of a Reva vehicle since October 2003, using it 
mainly as a mail-delivery vehicle in New Delhi.) 
 
Reva's founding and initial production 
-------------------------------------- 
 
¶3. (U) Reva was founded in 1994 as a joint venture between AEV LLC, 
a small technology company in California, and the Bangalore-based 
Maini Group, a family-owned industrial holding company with 
interests in precision machine components, granite, and specialized 
electric machines for materials handling in manufacturing plants. 
Its first electric car rolled off the assembly line in 2001, and it 
has sold approximately 3000 vehicles since then.  According to the 
company's literature, its main target markets are urban commuters 
(particularly in Europe) and relatively small islands, where the 
vehicle's range-between-charges of approximately 80 kilometers poses 
no problem for consumers.  Maini said that London and Bangalore are 
the two metro areas with the largest number of Reva vehicles on the 
road.  London alone, he said, has some 1000 Reva vehicles, 
encouraged by positive regulatory treatment from the British 
government. 
 
Recent developments and strategy 
-------------------------------- 
 
¶4. (U) The company began marketing in 2008 its second model, Reva-i, 
followed in 2009 with an upgraded version that uses lithium 
batteries.  Maini said that the 2009 Frankfurt auto show was a major 
breakthrough for the company, and that it drew "a lot of attention" 
when it rolled out prototypes of its newest models, the NXR and NXG, 
which will be ready for production in 2010 and 2011.  Press reports 
indicate that the price for the NXR will range between USD 9000 and 
USD 18,000 depending on the market and version, and up to USD 33,000 
for the NXG.  Maini emphasized that these models show significant 
improvements in design, range (up to 200 km between charges), speed, 
and size. 
 
¶5. (SBU) Maini said that Reva reached in September a partnership 
deal with General Motors India to produce key components -- 
including the engine and battery system -- for an all-electric 
version of the Chevrolet Spark for the Indian market.  This deal, he 
told us, furthered Reva's technological reputation and commercial 
credibility.  He gave us a tour of the construction site where Reva 
is building an environmentally-friendly plant in Bangalore that can 
produce up to 30,000 cars a year.  The shell of the plant and roof 
are complete, but no machinery has yet been installed. 
 
¶6. (U) Maini told us that the company endeavors to strike the right 
balance between affordability and state-of-the-art technology, 
making Reva sensitive to market conditions and conscious of cost 
controls.  Reva's products are currently marketed in 24 countries, 
and the company has attracted investments from major U.S. financial 
firms, including Global Environment Fund and Draper Fisher 
Jurvetson. 
 
CHENNAI 00000003  002 OF 002 
 
 
 
Coming to America? 
------------------ 
 
¶7. (SBU) Maini said that Reva is negotiating a deal with Long 
Island-based Bannon Automotive to license some of Reva's technology 
for a factory to be established near Syracuse, New York.  Maini was 
vague in his answers to our questions about how close the two 
companies are to finalizing the deal, while acknowledging that a 
U.S. factory would be critical for Reva to penetrate the U.S. 
market.  He noted that Reva's cars would need to overcome several 
technical challenges to have a viable future in the United States, 
emphasizing that current Reva models were conceived with the 
European urban lifestyle, mentality, and safety standards in mind. 
He indicated that the company is currently working toward getting 
its new models through the process of meeting U.S. regulations, 
which he said would take about nine months. 
 
¶8. (SBU) Media reports indicate that Bannon has already secured the 
financial backing of New York State for the project near Syracuse 
with the involvement of Senator Charles Schumer and Governor David 
Paterson.  The company is reportedly currently seeking federal 
assistance from the Department of Energy and the Department of 
Agriculture.  A Syracuse-based newspaper reported that Bannon 
Automotive announced in late October its plans to choose a 
production site within two to three months, but we have not seen 
reports since then confirming the location of a specific site. 
 
Comment 
------- 
 
¶9. (U) An Indian company's technology transfer leading to job 
creation in the U.S. would be an intriguing departure from the usual 
trend in bilateral commercial relations.  Foreign direct investments 
and licensing agreements have been a key part of India's growth 
strategy since economic liberalization in the 1990s, and many U.S. 
companies have been attracted to India for its large potential 
market and relatively cheap and skilled labor.  Reva's potential 
partnership with Bannon runs counter to this pattern, hinting at the 
possibility of Indian-developed technology as a potential source of 
manufacturing job creation in the United States.  The partnership 
arrangements with Bannon and GM are interesting opportunities for 
the company at a time when electric vehicles appear ready to take 
off, marking Reva as a company to watch in the years to come.  End 
comment. 
 
SIMKIN