What are the main reasons for failure of Reva Electric

Car in the automobile market?

Reva faced many disadvantages during it’s time. Few of them are listed as follows:

1. Price – The car was priced at almost the same cost of the competitors. When the car was
announced they had predicted a price of 0.165 million, but the launch price was around
0.2 million. India is a very price sensitive market and REVA was not a value for money car
during it’s launch. This was because of the rise in import costs and reduction in subsidies
given by government.

2. Seating – A typical passenger car could seat around 4 adults but REVA could only seat 2
adults and 2 kids.

3. Performance – REVA has a top speed rated at 80 kmph. The competition had a top
speed of atleast 140 Kmph.

4. Range – The car had a range of 65 kmph. Buyers cannot simply use the car for other than
city commute.

5. Charging stations – This was simply non existing at that time. Even in 2018 there are
little to no charging stations in the country. Whereas one can find a Gas station for every
30 kms across the country. A potential buyer had to charge the car either at office or
work. Cross city/state commute was not a possibility with the car’s limited range.

6. Aesthetics – REVA was not a visually appealing car. It looks more like a built for a
purpose vehicle. The competition looked far more visually appealing.

7. Brand Image – RECC was a new name in the market and customers were skeptical to
invest in a brand. One cannot comment on the after sales service, spares cost, customer
service, etc. for a new brand.

8. EV revolution – REVA was a car ahead of it’s time in India. People were not educated
properly on the global warming caused by greenhouse gases and why it’s better to
adopt to EVs for a sustainable future. Government should have done a better role to
promote sustainable energy educating people of it’s benefits.

Choose a set of business level strategies to create a

successful business model for Electric Car Reva. Explain.

The company can follow the following strategies:

Cost Leadership – India is a price sensitive market. Here people always go with the value for money
quotient. RECC is a new player in the automobile industry so people will be skeptical to invest in a
new brand unknown to them. The company to survive must price their product competitively and
give the customers a value for money quotient. The company needs to focus on marketing how the
car is cheaper than the completion to own and maintain over the years.

Focused Differentiation – The company needs to market the car in a different way. How it differs
from the conventional cars. Why this car is good to the long run and a sustainable future. How
people can save money though the car’s initial cost is similar to the competition, etc. Customers
needs to be educated on why the EV revolution is important and how shifting to REVA will help save
our environment leading to a sustainable future.

By observing the availability of fuel for automobiles at

global level, it is understood that there would be
shortage of fuel for automobiles in near future. So there
is high demand for electric car in future. Provide your
better suggestions to improve the electric car business in
general and Reva car in particular

Electric cars are catching up with fossil fuel cars in terms of technology, performance, cost, etc.
though the following points can be improved to make people adopt them at a faster rate.

1. Price – Though the prices of the EVs are shrinking, it’s still out of reach for a common
man. Car makers must work with governments and local vendors to localize the product
avoiding any import costs and provide the car at a price that can be purchased by the
mass population.

Reva – The car must be competitively priced to be accepted by the mass population. The
cheapest car from Mahindra Reva E2O currently costs around 8L exshowroom. This is
significantly higher than a Maruthi Alto or a similar segment car. Mahindra should work
on bringing down the price of the car.

2. Range & Performance – Two years ago, the performance figures of the EVs were
disappointing. Typically an EV had a top speed of less than 100 kmph and a range of
about 70 kmph. But this has drastically changed with the new cars introduced by Tesla.
The Tesla Model S had a top speed of 250 Kmph and performance that put fossil fuel
cars to shame. Also the range was a whopping 500+ kms on a single charge. This was
unheard of for an EV.
 Reva – The car has a top speed of 80 Kmph and a range of 65 kms. Also the car struggles
when climbing uphill. This is nowhere compared to what Tesla is offering. Mahindra
must invest more on R&D to make Reva atleast 50% on par with what Tesla is offering.

3. Charging stations – The car makers must work with the government to install charging
stations across the country. This is the major reason many people put off buying an EV. A
middle class Indian citizen can afford only one car for the family. So it has got to be an all
rounder, it must serve his purpose of commuting and travelling with family to other
cities.

Reva – This is non-existing currently. There are no charging stations installed in the
country. A buyer is left with an option of only charging the car at home or at work.
Mahindra must take an initiative to install charging stations across the country in stages.
They can earn later from these stations when EVs are becoming more popular in the
country by charging other brand customers.

4. Aesthetics – Earlier years EVs looked like they were built for a purpose. They were small
and cramped. Car makers must make the EVs look like a normal car for people to accept
it and not be put off by the looks.

Reva – The car does not look aesthetically pleasing compared to what the competition
offers. Mahindra must work to make the car more visually appealing.

5. EV revolution – People are not educated properly on the global warming caused by
greenhouse gases and why it’s better to adopt to EVs for a sustainable future.
Government should have done a better role to promote sustainable energy educating
people of it’s benefits.

Reva – Mahindra can invest some money in marketing to educate customers on how
using a fossil fuel car is damaging the environment and how this will impact our kids few
generations later.