Punit Goyal of Blusmart reveals challenges and opportunities for the electric ride hailing services industry

The electric vehicles (EV) market in India is growing gradually as consumers are becoming increasingly conscious about the environment. Given that there is a long way to go before consumers get the right infrastructure to confidently opt for electric cars, there seems to be some optimism about more EVs making it on roads, especially given that there is a ride hailing platform in Delhi and Bangalore that is completely driven by electric vehicles. In this episode of the “I did it My Way Podcast," CNBCTV18's Sonia Shenoy gets in conversation with co-founder and Chief of Fundraising at BluSmart, Punit Goyal, who details the company’s growth plans, how he looks at the EV ride hailing market and how it plans to attract drivers and customers.

Hello and welcome to another edition of 'I Did It My Way', the guest on the show today is Punit Goyal, the founder of Blusmart. As we all know, blusmart is India's largest electric vehicle ride hailing service. Blusmart has raised almost $150 million from venture capitalists and now is on their way to growing their business in a market that is growing as well. Punit, hanks a lot for joining us on the show.

Punit Goyal: Thank you Sonia for calling me.

Sonia Shenoy: It is a you know, a wonderful journey. I think Bluesmart started in 2019. And now you're you guys have a growing disproportionately to the market, I would say considering the kind of you niche market that you have 5000 EVs at the moment on ground, but not in Bombay yet.

Punit Goyal: Absolutely. So we started our journey back in 2018. You know, it was an idea that time I just come back from the US. And I came up with this idea of starting a born electric integrated fullstack EV ride hailing service and EV charging network. And I pitched my idea to my co founder Anmol Jaggi, he loved this idea. And he said that is anybody doing it? You know, globally? I said, No, there's no such company. But that's the future. I'm telling you that the future is really, really convinced. I had met a mentor, who was Brent Callinicos. He was CFO of Uber. I met him back in 2017. And he and he told me that the future is electric, but the future will be electric only if you can build an energy infra mobility company intertwined together, and I had probably put in two years of research, all 17 all of 18 lot of travels to the US met every single charging company in the world, every single EV manufacturer in the world. And I kind of understood that to truly scale the EV ride hailing service, the missing box was the charging infrastructure.

And nobody's investing in charging infra and why somebody's not building large charging infra that they didn't see the utilization happening, because there were no EVs on the road. So there was this classic chicken and egg problem. And I thought if we could build energy infra mobility company in alphabetical order, and that's where our experience comes from - Anmol Jaggi and myself- we have spent 10-12 years building solar power plants in India. So we knew that this is the energy infra business, and we just wanted to add mobility to it. And that would complete the entire business of electric ride hailing and EV charging. We started off with 10 cars and two charging stations in Jan 2019.

Today BluSmart operates nearly 6000 cars in Delhi NCR and in Bangalore. Delhi NCR the largest market of India 24% of India's mobility and transportation market is Delhi NCR is also the largest airport of India, Indira Gandhi International Airport serves nearly about 25% of India's passengers who fly and that was the right market to start and we also launched in Bangalore. Now, we have in Bangalore about 600 cars. So, between Bangalore and Delhi we have about 6000 cars.

Sonia Shenoy: Why are you guys, not in Bombay yet?

Punit Goyal: Absolutely. Very good question. So, we have done all the homework and research and we have, you know, connected all the dots. Now, we are all ready I think hopefully next year, q3 calendar year 2024 should be the right time for us to go. You know, full on in Mumbai is my city. I live here. I'm from Mumbai and born and brought up here so I'm very excited to also launch in Mumbai, there will be a third city that BluSmart be launching in India.

Sonia Shenoy: Okay. You have a big scalability plan as well. 5000 EVs currently you said you plan to get to 10,000 by the end of the fiscal? Where are the funds coming in from?

Punit Goyal: So funds are obviously a very challenging thing to raise all the time. And when we started off, nobody believed in this idea that we can actually do this, while they knew our track record and background of a path businesses, but they were still not convinced that somebody can take the behemoths on, which are our friends, Ola, and Uber. And we are extremely grateful and thankful to our angel investors, who initially backed us on our face and on on a simple presentation we made to them. And over the years, we've got some very, very good institution investors, from the US and from the UK.

One of one of them is BP ventures, British Petroleum ventures. Again, they are trying to ride the energy transition wave. They understand that the future is electric. It's imminent that all cars in the future will be electrified. A lot of fleet electrification initiatives are taking place in the UK as well. So we could raise a bunch of capital from institutions like green frontier capital, like BP ventures, large sovereign climate Wealth fund whose name I can take right now. It's just in the closure. And we have raised a decent amount of capital, we've raised about one in $46 million till now in venture capital, raising another $50 million now with the next one month's time. We've also raised money from DFIs.

So a lot of large development financial institutions are backing us from the likes of power Finance Corporation, Indian renewable energy development agency, and these are institutions or DFIs who believe that India is now poised to grow towards clean energy and clean mobility. So now earlier projects also we had got a lot of support from them. They had funded our solar projects And now they're backing us for our EV, EV story or EV journey. So we raised about 100 and $80 million from large DFIs, like PFC or IRIDA, who are giving us money for buying chargers, buying electric cars that will bring on our platform.

Sonia Shenoy: Okay, I'm going to talk about the whole, you know, clean energy renewable story in a bit. But before that, as you said, it's, it's a tough thing to sort of take on these behemoths in the industry like Uber, Ola, etc. But let's talk about the business model, right? Because it's very interesting. I mean, if you look at the Ubers of the world, they have a very asset light model where they don't really own the cars, they hire the drivers, but your model is exactly the opposite, where you own the cars and drivers on your payrolls. So what is better profitability wise? And what is better in terms of scalability?

Punit Goyal: Absolutely, I fundamentally believe that you can never make money or profits if you don't own any part of your business. And asset light approach really works well in countries with asset ownership is really high. So in the US, the asset ownership is about 750 cars per 1000 people in the UK is about 650 cars per 1000 people and if you look at our neighbor, China is got about 275 cars per 1000. India is the world's largest 2 and 3 wheeler market. So, Indians probably use cycle, bicycle or tri-cycle or two wheelers, three wheelers right into the largest manufacturer, two wheelers and three wheelers, and the largest consumer of two wheelers and three wheelers. And when I was doing my research fundamentally in 2016-17, and 18, I understood that India is not a large consumer of four wheelers, it's only about 40 cars per 1000 people. So we knew that, if at all Uber and Ola had to go electric, it'll be on, they will be depending on individual people to buy cars. And these are drivers, right. So they have two big challenges - Drivers don't have good credit scores, and they can't get financing at a lower rate, right and financing is very difficult for them to come by. And they also can't figure out where the charging will come from. So we knew that this EV story or this ride hailing story with electrification will never happen. The EV manifesto, the EV mandates of Uber in India and Ola will not be really successful, or they won't be able to achieve it because of the business model. So we wanted to tweak the business model. And we thought that let's apply -I'm an economic student -  So I thought if we apply Pareto Principle, instead of going to 40 -50,000, drivers to bring 40-50,000 cars, we'll go to five or 10 institutions and bring cars on the table, it's much easier to go to five or six large development financial institutions and secure assets than go to 40-50,000 people to secure assets. So we did that. We changed the entire supply side and institutionalized the supply side, from individual ownership to, to now large institutions chipping in and deploying 15,000 cars, 10,000 cars, that was much easier to do. Second challenge we understood was, in this electrification journey, we'll be charging infra. And we knew that we had the background of energy and inertia. But these companies, the only app companies, right, match.com, mobility, or Airbnb of mobility. And I knew from day one that you cannot create an Airbnb of electric mobility, what will you aggregate, which doesn't exist, so there are no EVs on the road, and there's no charging for the road, it'd be very difficult to build an Uber of charging or Uber of electric mobility because assets don't exist. So we thought we'd have to create it from ground up, right, India is a $3.7 trillion economy right now. And as per McKinsey, India will be $11 trillion economy - That won't happen on SAAS, it will happen with infra investments, you need to invest in airports, power plants, roads, you need to make more cars, more charging infra - you will have to do a lot of infra investments. So we knew from day one that this is an intra game. So let's get the cars let's do the capex. Let's build a charging infra, let's do the capex. build everything from ground up, build essentially an energy infrastructure and mobility company all intertwined, interconnected. And that's a huge moat. Because then what you're building is the threat of charging. So when I pitched my idea to my co founder, I remember just come back from the UK in 2018. I told him that look, Starbucks has a massive advantage in New York because you see Starbucks everywhere at prime location, so you walk in there not to buy a croissant or muffin, but to buy a bottle of water because see Starbucks everywhere. Apply the same logic to London, you see Pret everywhere, so I walk into a Pret to probably get a bottle of water not to buy any food from them. If we apply the same logic and build EV charging super hub - BluSmart today operates 1.5 million square feet of EV charging infra across Delhi NCR and Bangalore across 36 EVcharging super hubs. Each hub ranges from about 50-60,000 square feet on the smaller side to about 160,000 square feet. Like in a shopping mall. and Vasant Square shopping mall, which is in the heart of Vasant Kunj in Delhi, we have minus two minus three - two  basements in the mall, where BluSmart has parking for 400 cars, charging for 400 cars spread across 160,000 square feet with two megawatt power load. So we get energy connection, we get the prime real estate,  we get demand with a capital leaf in BluSmart cars and we utilize entire hub. So we have industry leading utilization of the charging infra and and the whole idea is to replicate the Pret of charging so build evey charging hubs at prime locations in the city. Every city has two challenges. They have finite prime locations, and there is finite power load. So you need to create that infrastructure and you do tap the best real estate, bring the energy connection, then bring the electric cars to utilize all the infra that you created. And that creates a virtuous cycle. So build hubs bring cars, utilize them create the virtuous cycle, I call it the BluSmart virtuous cycle. And that really spins the growth success story and, and that's how we started one hub here today with 36 hubs. We started with 10 cars today we have nearly 6000 cars. And for a company like Uber and Ola is very difficult to do because they were never designed like that. So BluSmart is a born Electric Company. A lot of people are transitioning to electric. So when you transition, it takes a lot of time - it could take about 20, 30 or 40 years for transition to happen, which eventually will happen and I'm sure that it should happen. It should not be a monopoly. There should be other players who should be doing what we're doing.

There's green now is absolutely and they're trying their level best to add some EVs day to day I think operate about 500 EVs. In fact, we started on their platform. So BluSmart was launched on the Uber platform. I remember the first 2030 cars we had we met with the Uber team and we said that look, our app is not ready. You have your app, which is running, can we deploy some of the cars on the platform. So BluSmart started off on the Uber platform - we scaled from 10 cars to 300 cars on the Uber platform. We operated for nine months on the Uber Delhi NCR platform. We did 1000s of trips for Uber customers. And everybody was so pleasantly surprised that they booked an Uber and a branded BluSmart car is coming.

It's like you're buying an Air India ticket and Vistara plane comes and picks you up and your experience is elated. You know such superior experience and and we told them Yeah, look, look, our app is coming. Don't worry, wait for some time. It was 5th December 2019 we said Tata  Bye bye to Uber. We launched our own app. Since then we haven't looked back we have done now. We have covered about 310 million kilometers. We have done about nearly 9.5 million trip - shortly touching 10 million trips.

All this with an app store rating of 4.9 out of five. Customers love us, women love us, I think when I post on LinkedIn, we will LinkedIn startup of the year 2023 ranked second, previous year in 2022, ranked 10th and in previous year 2021,  ranked 16th. And every time I post on LinkedIn, I see a few 100 comments and 80% of them are women. And they say what a safe, accountable, cleaner, reliable, affordable ride hailing service you guys are building, it's so good for us to travel. I can pick up my child from school in your car, I can go to drop my child, you know, in your car, it's a branded service.

Sonia Shenoy: So, what is the incentive for someone who has been traveling with Uber, Ola all their lives and need to switch to a BluSmart?

Punit Goyal: So you know, when we were starting up, we knew that the moat could not have been scaled. We can't beat them on scale. The idea was very simple. We wanted to beat them on quality. And quality was absolutely missing. When you take an Uber in the UK or you take an Uber in New York or in San Francisco or San Jose, the experience is amazing. When we take an Uber in India, you get a white colour car, which could be a Swift Dzire or Ritz and the driver has not kept it clean as the drivers trying to fend for himself. He's not had the chance to earn well, he's not had a chance to bathe  how can you keep the car clean. So when I spoke to consumers back in 2018-19, they told me, Punit I have two problems. There's a lot of ride denials that are happening. For example in Mumbai, if I'm in BKC area, and I want to go to Diamond Point, the judge will say you know what, Mr. Goyal, I would like to go back to Dahisar or Kandivali or Borivali. Because I live there and I don't want to travel in the direction you want to travel. So I'll deny the ride. And this just, you know, puts off  the customer.

Second challenge that we got to know from the consumer was surge pricing. Since it's an app platform, the job of Uber is to show drivers where the demand is and show customers where the cars is right and this matchmaking is what Uber does, and for that it charges a commission. But for doing that it does heat mapping it knows where the demand is. So a lot of surge  happens if they see the car is not there, they increase the price in that region so that more and more drivers can come to that area. But that is wrong. The pricing goes over the roof sometimes you end up paying you know like Rs 40 to Rs 50 a kilometer for ride which was meant to be Rs  18 or Rs 20 a kilometer. So, we thought if we launch industry-first features of zero ride denials and zero surge pricing, that will be absolutely game changing, right. Nobody has done that globally. We launched with this idea.

Sonia Shenoy: BluSmart has zero ride denials.

Punit Goyal: Yes, we have Zero ride denials. There's zero surge pricing and the learning were again from global transportation platform. So BEST in Bombay, Delhi Metro or tube in London or subway in New York, none of them do right denials. Not all of them are public transportation platforms and reliable ones, but they don't do right denials and they don't do surge pricing. Regardless of the time you traveled during the day.

The pricing of those platforms are the same, right. So if the match is happening at Wankhede, or whatever is happening, the pricing of BEST bus doesn't change right same match is happening in Delhi, Delhi Metro keeps the same pricing. So we thought to apply the same logic to the cab market customer just loved us. And the branding of BluSmart on the card, the accountability, that's a BluSmart branded car, right, so they accountable for the service. It's not that we're washing our hands off of the service. So we wanted to create that safe, clean, affordable, clean cars, happy drivers, happy drivers translates to happy customers, the driver has no stress, since we own all assets, we know the driver's core skill set is to drive a car , the driver is not JPMorgan, or Craigslist, or Macquarie or Fairfax. The drivers' core skill set is to drive and not bring an asset on the table. That's an additional thing that driver was doing. So we simply decoupled the driver from asset ownership. And we told the driver stick to your core skill set what you're good at, you're good at driving, do that. We'll bring the asset on the table.

Sonia Shenoy: So you filled all the gaps basically, that Ubers and Olas of the world have?

Punit Goyal: Yeah, so we learn from them. I think they're an amazing service globally, I vouch and use Uber, it's an amazing service and was born in the US to solve their challenges in the US. It's a $2 trillion automobile market in the US GDP $3.6 trillion. I don't know you can correct me. But the GDP of India $3.6 trillion, the automobile market in the US is $2 trillion. So they wanted to monetise assets which are on the roads. And that's how Uber and Lyft were born. But you can't replicate that in a country where the asset ownership is only 40 cars per 1000 people, right? So you can't create an Airbnb of electric mobility or Airbnb or mobility.

Sonia Shenoy: In terms of pricing, what is cheaper?

Punit Goyal: So we never started a service to be cheap. The whole idea was to be like Indigo airlines or like Vistara, give quality to the consumer charge customer a premium for it and customer is willing to pay for it. But we happen to be a cheaper application, because our friends (OLa and Uber) surge . And because the surge goes over the roof, we can't match this surge because the pricing is consistent. We do price division maybe in six months or once a year. But once we do it is on the app, its very, transparent. So the consumer, you can go on the Bluesmart app. And you can see in Delhi, this is our price slab: zero to five, five to 10, 15 to 20, 20 to 25. All the slabs are mentioned. And the pricing remains there for six months, nine months until we revise the price. But there's no price variation during the day. So the price is consistent. We should be I think five or 8% premium in terms of pricing to our friends on a normal day. But if you see your average last 20 bills or Bluesmart or competition, you'll see that we have been about 10 to 15% cheaper because we don't surge pricing during peak hours.

Sonia Shenoy: I like the way you call them friends and not competition.

Punit Goyal: We are doing the same thing. Our singular goal and focus for everyone is to deliver a good consumer experience. Somebody can do better than somebody else, right? But we all have the same mission to provide consumers a good experience while the traveller commutes within the city.

Sonia Shenoy: At the end of the day, a startup is also about eventually turning profitable, right? So at what point where are we on that timeline.

Punit Goyal: We chose EVs to be profitable and we knew that you can never make money in India if you run your cars on CNG or petrol or diesel. So, when I wrote the white paper of BluSmart back in 2018, I was fondly telling my co-founder that the cost of CNG at that time was about Rs 37 a kg, the cost of CNG today is nearly double of that at Rs 85 per kg it had gone to Rs 95 a kg. The cost of CNG has gone up two-and-a-half times the cost of petrol at that time and I was thinking of BluSmart an idea and my it was about Rs 72. I was thinking what if the cost of petrol is goes to about Rs 150 a litre. And I knew that the cost of petrol or (they call it gas) in the US is $1.16 to 1.20 per gallon. The cost of gas in India is more expensive than the cost of gas in New York, it costs about dollar 25 cents for the further for the Federal petrol. How can you ever make money if the cost of fuel is more than the cost of fuel in the US it's impossible for you have to change the form of fuel. And electric vehicles allow you to do that the cost of running an EV, I use an EV here individually and we are thousands of cars of Bluesmart.

So, the operating cost along with the capital cost if I convert the capital cost plus the operating cost, the total cost of ownership is much better compared to compared to ice ice vehicles which are petrol diesel gas fingers now, how does blue smart make money so we charge consumers you know the tariffs for for traveling. We are doing today nearly about seven, seven and a half trips. And as we continue to grow, we are now reaching profitability. So I think once we crossed 8.2 trips, we should be profitable. We are just less than a trip away to turn profitable. And that has been a journey which has been an amazing journey of four years. We've weathered the pandemic you totally shut down. There was no native ability to trips No I did sorry.

I didn't To each trip, the average order value of each trip is around four, four and 50 rupees to foreign rupees, we're doing only about seven, seven and a half trips. And with our expenses, we need to do eight, eight in eight in half shifts to do our break even. And the cars can do about 12 to 13 trips per day, given a 12 hour day, because in India, you can do 1.1 trip per hour. So, in 12 hours, you can do nearly about 1314 trips. And as our geography is expanding, we are increasing the number of trips, for example, give you a lemon lemonade, for example.

So we have finite pick up points and in finite drop of points in Delhi NCR right now we can drop your Noida or greater Noida, but there's no pick up from there. So the car goes there it comes empty. But I offered more charging hubs there and I allow consumers to come immediately I'll get one trip from there. And there's certain more geographies in Delhi NCR. So the entire theory or thesis is to go deep and wide in the city. And as you deploy more cars, so I think near the nine or 10,000 cars will be much above that zone and will be absolute in black. So next year is to the year to be in black.

Sonia Shenoy: Then are you do you have plans to do an IPO?

Punit Goyal: Yes. So my co founder and mole probably his IPO specialist, since he listed his company. He founded Gen Sol, which is on the exchange. I'm learning from him how to do IPOs. And still early days, but probably Yeah, the way we expanding and the way our consumer love is growing, we may have a lot of retail participation, what unfolds is that consumers love us, let's tap into them. But maybe three years away. Right now we're using substantial amount of private capitals, and climate fund capital. So we are set for the next two or three years.

Sonia Shenoy: and you've been in this renewable energy space for very long right before Bluesmart is when you had plg. Tell us a little bit about your sustainable sustainability journey. And what do you see as the future?

Punit Goyal: So my right out of college, when I was studying in the UK, I wrote a dissertation on renewable energy. And while writing my dissertation, I figured out that it's a great industry to be in. So I spent all of 2007 in Europe and in the US researching about, you know, what the solar market is why Europe is buying so many solar panels, why these companies are now why these countries are now going renewable. What is the government focus, and I learned that at that time, the market was pretty big in Europe, in Germany, Czech Republic, Spain, they were building these massive solar power plants. So when I came back to India, I decided that I started with a solar panel manufacturing facility, very bold call at the age of 24. I didn't have a co founder at that time, a lot of learnings also along the way I learned the four years were great, and also very tough for me. And for years, we achieved a decent success. We had manufactured and exported about 70 To make our panels to your chief revenue, the close $210 million, it was all going great until the market just plummeted and crashed in 2013 12. In Europe, Europe pulled the plug on their feed in tariffs, the US we call it fit feed in tariffs and decided to not pursue the renewable energy ambitious because at that time, some of the countries in Europe were not doing well with Greece and some challenges in Spain. And I had set up this massive factory with the whole idea it was the export oriented unit. So the whole idea was to make panels here export only I was not ready for the Indian market that time. And that was a big learning for me and I had to shut shop, my first venture immediately call it off. And then I had a pretty challenging time in 2012 2013. I got really stressed out didn't have a co founder. In fact, my learning over the last few years have been it's good to have a co founder to share your pain when I put on a lot of weight at that time I got thyroid, but somehow managed it and with the support of my wife and then bounce back and started my second company which set up a 20 megawatt solar power plant in Gujarat, India opened its doors for setting up energy plants renewable energy plans. And I then second set up my second company PLC two called Big photovoltaic. And we set about 20 megawatt solar power plant in Gujarat, in part in big Danish initiative. My grandfather, she pushed with them Largo and he passed away in 2007. So I thought I should probably start all my companies with his initials to probably give them respect. And the second project turned out well, we set up that 20 mega project in Gujarat, we invested about 60 $62 million at that time for building that project. And we sold off. I sold of that project after two years of running it to the mill group for $68 million. That was my second big journey. And my third was a big clean energy project for my third company where I set up a 70 megawatt solar power plant and today in Maharashtra.

Sonia Shenoy: A lot of experience in in starting businesses.

Punit Goyal: Well, I mean, I it just happened I it was not planned that way. But opportunities came along the way. So I kept on starting another venture, but it was my second company PLC photovoltaic when I met Anmol, my co founder now it looks smart. His company Jen saw had built that 20 megawatt solar asset for me, so I met him back into Tell them to Elvin I had no idea that seven years down the line, we'll be starting a company together in 2019.

Sonia Shenoy: So what do you think the future of the EV industry in India is? I'm asking because as of now a lot of the EVs are powered through coal based power plants. And, you know, that is, of course, as we know, not the future future is to move to sustainability and to maybe thermal based renewable energy, etc. But how long do you think that transition will take?

Punit Goyal: I mean, I think the transition can happen immediately, we don't need to wait for so long I can speak for new smart and I can speak for the industry overall. So, India now has one grid one nation policy, which means that you can feed the power from anywhere and feed it to the central grid and you can draw the power from anywhere right. So, India, NOW, TODAY accounts for nearly 63 64% of all the power that generate in India, the installed capacity is to read thermal power coal based and 37% or 36% of all the power generated in India installed capacity is non coal based. So that's, that's where we are. So even the energy that we use from the grid today is at least 37% non coal base, which is a good step to start with. And that's what we have been doing along the last three four years using energy from the central grid, where energy today sources 63% coal powered and 37% is non coal part renewable is a part of it. So renewable contribution could be about 25 26% of the overall energy mix.

Sonia Shenoy: So the target is to reduce that 60% of coal power and move more towards non coal based.

Punit Goyal: Yeah, India's target is by 2032 Ministry of power guidelines is that and it's on their website also then by 2032. All the new power plans which are coming up now, none of them are coal based power plants. All are renewable and solar power plants in the in the last 10 years has added nearly 100 gigawatts of wind and solar plant, which is an amazing feat. No country in the world is going the way India is going. But Bluesmart doesn't need to wait for that. So our goal from day one and more than IVR serial entrepreneurs in the energy space was to decarbonise mobility from day one.

The goal was to use renewable energy. I think now the time has come Bluesmart today operates nearly 150 megawatt of batteries in cars, which is a massive amount of 150 megawatt of batteries is an all BluSmart cars. Now the time has come to use renewable energy. So next year, early next year, you will see BluSmart making a large announcement could be Jan could be Feb, where BluSmart would use 100% renewable energy from a dedicated solar power plant, which will provide energy to BluSmart charging stations via the central grid of India because and because of the laws of India allow that to the main grid and open access policy.

The entire fleet of Bluesmart 10,000 cars will be 100%. And ready to be energy by solar Bluesmart will become the world's first and largest EV ride hailing service to be 100% powerbridge energy that's one of a kind. Nobody's ever thought of it at that scale. And nobody's ever done that. So and that's when we'll be truly decarbonizing mobility because right from energy consumption, generation to consumption is 100% renewable.

Sonia Shenoy: You said, right out of the, in the industry in the AV industry, 60% of the power is still thermal power, it still holds generated power, which of course is not the goal. How long do you think it will take for the entire industry to move from thermal to renewable.

Punit Goyal: I think India as a country has massive challenges. We are too big a country in Bath country, I don't know if any country of India scale in size globally, which has been 100% running on renewable energy, there are some small Nordic countries and countries in the in Europe, which largely have a mix where renewable energy has taken a lead which 70 to 80% still being, but 20% still is non renewable energy with power. India, the country will it will take at least about 3040 50 years more for it to actually renew remove coal as a back-up plan. Because, you know, I mean, the last growth whatever is whatever has happened has been the last 30 years.

And we are not ready right now to completely shift coal out. But it's awesome to see that coal has come down from 95% When I was, I think a standard for if I'm right in 94, India's dependence on coal sector with about 95% of India's energy mix. And it's so proud to see the government playing an amazing part in the last few governments also doing the bit that in the last 30 odd years India has leapfrogged from 5% non coal energy mix to now 35% You also have to take into account that India's energy requirements are going up. Today India's installed capacity pulled in is about 450 gigawatts and India's total pulled in installed capacity is expected to go to 900 gigawatts by end of this decade. That's what the planet ministry power is.

So 550 gigawatts of new power power will come to India and that will be largely a mix of 6040 by 60% will be 70% of the solar and 30 40% will be coal based and if you see the overall number by end of 2032 will be all the power combined, which is found in McCord installed and the new plants coming in 50 will be coal based and 50 will be renewable based. So that's how it will pan out but that's it redevelopment of India scale and size, the Indus population is also the largest in the world.

Sonia Shenoy: Yeah, absolutely. So I mean, of course, you have a long journey ahead. But coming back to the industry, right? Globally, ride hailing companies have had a tough time with profitability, largely because of perhaps scalability issues. You know, we were talking about this, how aging of the vehicles that they own themselves becomes an issue and then eventually the fixed end consumer. But in your case, things are different. Because as you said, you own the vehicle yourself. You can focus more on service on quality. Is that going to be the strategy over the next 10 years as well? Or at some point, do you think you may have to move to the other model?

No, absolutely. We stick to our model, our model is COVID proof and, and and we know our model is absolutely built built on right fundamentals. It's not right healing is profitable, but you have to choose to do your business in the right location. If you go out in build your business at 20 3040 cities, it doesn't make sense. You know, I read the I don't really get excited by what newspapers say I read balance sheets of companies. And I see that these companies, in fact to name Uber, they're doing pretty well in markets, which makes sense. Uber operates in 1000s of cities.

But six, seven cities, which is Chicago, New York, SF Bay Area, la metropolitan area, San Jose, Sao Paulo, London, these are profitable cities, Uber is making tons of money there. Between these cities, probably seven cities put together Uber operates 34% of the global revenue of Uber comes from these six, seven cities, and they are the largest markets for them. But there are some markets where they don't make money, if I apply the logic for Bluesmart in India, I probably figured out at early stage that applying Pareto principle that Delhi NCR, Bangalore and Mumbai the triangle Chatrapati Shivaji airport Kempegowda International Airport in Tehran, the tertiary airport accounted for nearly 70% of India's aviation market or 65% 65% of India's mobility market with these three cities if I had Hyderabad, Chennai in Calcutta, 86% of India's mobility and transportation market or ride hailing market is the six cities so you can make money here a lot of money, but if I launch in 20 Other cities where I'll be competing with a three wheeler or with a two wheeler that's when the burn happens. The whole idea was a figured out the right business model figured out the right city, where do you want to launch where you can you make money using EVs is an upside because you can make money in Delhi you can make money in Bombay you can make money in Bangalore, but you think EVs is an upside because now the model comes in and with the BluSmart business model of owning the assets, we have better control. See how aviation market works is the planes which are manufactured by Boeing or Airbus are operated by these aviation companies Indigo and Mystara for 25 or 20 years, where you have to maintain the engineer to keep the plane in check you to keep the physical fuselage in check. Because the fact that planes are parked at the airport, the variant is minimized and they check so we keep calling the car back to the hub where the driver comes in. They pick up a car from a fully charged fully loaded car from the BluSmart charging of the job. They do all the trips assigned trip during the day, they drop the car back at the hub. So the car in the morning in the evening is in mint condition.

If they have any wear and tear, or any minor injury to the car, we keep the problem small we don't allow a problem to become big in life if the problem is they address it you don't allow the problems to like spiral lubricant that allows us to keep the car in shipshape the car can perform longer hours, it can serve more customers consumer they're really happy. So we believe that this asset ownership model is the way forward for electrification of lease to happen. And now comes the charging and proper at the scale of Bluesmart. We're doing millions of kilometres millions of trips, we can't depend on third party approach for charging.

We can't allow the driver to go figure out where the charging is. If you if you're if your state of charge SOC of the car runs out, you can't go figure out where the next charging station is right. And you can aggregate all the charging for no no charging for operator I know is sharing the data and creating an Uber of charging and you cannot expect the driver to find us yeah I'm sure he'll be able to find in 1020 years from now when there will be 1000s of charging stations but not today. It's not happening today.

So we thought our hub approach or supercharging hub we call it super EB two EB supercharging us does the right way for the car to come back to the hub get cleaned up. Driver changes the duty the Chi the gain in great shape and condition fitness certificate is given to the car. The car goes back again the car is fully charged and we optimize the entire cycle. If a car runs out of charge, the driver can go plug it into a charging station take a fully charged car off he goes. So we optimize just the way how airlines optimize along with parking spots at the airport. A put is not only a place for embarkation disembarkation it's also where the technical snags are checked. Airlines refuel for longer flight hours pilots are changed.

Sonia Shenoy: The airline model is also a loss making model for some people.

Punit Goyal: And for some people. Yes, I mean depends on what kind of alien Are you building? It also depends on that who your competition is. Are you secured by way of financing costs? Do you have the right fuel costs? So

Sonia Shenoy: That was just on a lighter note. I mean, you, of course can compare that too.

Punit Goyal: We learned a lot from them. I am not an aviation expert, but I've been learning the way they operate, right. So I try a lot, I probably did five or six slides a week, I fly a lot. So So I do know how they operate. And I met some of the industry leaders who upgrade those planes and not to name them. But a lot of learnings from the aviation market and and fuel cost. You need to control the fuel costs, why you make money is because you have the right input costs, why you don't make money because you don't have the right input costs. If you don't, if you have not figured out your input cost, you're not you're going to lose

Sonia Shenoy: Absolutely, and ETF prices, as we know a 40% of their EBITDA for each quarter.

Punit Goyal: Figured out and some make people make money by selling food to you, we'll know which airline makes a lot of money by selling food, declared the results. But But yeah, so you need to figure it out how to make money and you figure it out, then you will eventually make money.

Sonia Shenoy: Okay. Finally, before we let you go, as you said, you, as you said so yourself, you're a serial entrepreneur. So what next?

Punit Goyal: Well let you scale do smarter. I, the focus is very clear on a singular mission to build it across India and also overseas. We are also launching in Dubai and Abu Dhabi. Now, the launch is in November and December. And then we'll be scaling across the MENA region, opening up the markets. But the focus is right now to build across Delhi NCR Bangalore launch in Mumbai, go big in the MENA region, starting with Dubai and Abu Dhabi, I think it's going to take a lot of time for us. We haven't scratched the surface as the markets massive, we are still learning we are very, very early in what we're doing right now a lot of innovation is to be done now technology will change will change to keep learning keep adapting. But I think the next 1015 years, we are super laser focused on what we are trying to build.

If you had to go back and change something about your entrepreneurial journey, what would it be?

Punit Goyal: Well, yeah, I would definitely like to go back and rewrite, but I think it doesn't make sense now to go back. But, but the learning has been that good to have a co founder good to, you know, then you can build a solid company and you can share. Being a solo founder, I think it's pretty challenging. You can make mistakes, or do wonders. Also, there have been some amazing entrepreneurs who have done so well. But God knows what the challenges were, and how they dealt with it. But But I think my key learning has been, I, if I had to go back and rewrite and restart, everything would have should have been with a co founder, because I'm sure I haven't any flaws, which, which I don't know how to fill the buckets or fill the checklist. And now with my co founder, it gets balanced out what I'm good at. I'm not good at co founder bring the Lord experience and support guidance.

Sonia Shenoy: Okay, that's great. And finally, since you are in this renewable energy space in the sustainability space, I wanted to ask you, what's the next big theme from a country perspective, you know, overall, where do you see a large part of the funding going into over the next 10 years

Punit Goyal: Infrastructure is where India will see I think nearly $2 to $3 trillion will come to India to build infrastructure for airports, charging stations manufacturing of cars. India is now picking up that number may change India may leapfrog to be 60 cars per 1000 people and all that with the way people are buying cars. The car sales market is also picking up people are. So I really believe that the next big opportunities in renewable energy, building more renewable energy assets, big opportunities, building in building charging insurance, as India now electrify itself, and more and more EVs are coming on the road. Huge opportunity to build charging stations charging hubs.

That's what we are on to now. Our next big focus is to build out massive charging hubs, not for ourselves also for third parties. So what I didn't share with you is that these charging hubs today that we're building not only for Bluesmart Bluesmart brings the demand with a capital D from day one. So we are the anchor tenant to the charging hub.

From day one we underwrite the demand, but the charging hub is built and designed for third parties. It can also it's like a shopping mall, right so two or three large stores at the front of the mall underwrite the entire cost of setting that mall up for that area. But then other stores bring in the cash. So the charging of that we are building right now to cater BluSmart's demand and when the cars are on the road doing business the hubs are empty for others to come like picking prime locations like we are operated on brown in Delhi or next to the airport next to Delhi.

So anyone with an EV can come in right next to Delhi airport within a periphery of three kilometers or four kilometers a maximum five kilometers we have nearly 250,000 square feet of recharging of that such prime location and in shopping malls like one of the prime shopping malls I mentioned in Delhi. There we have nearly 160,000 square feet that's one of the malls now. We're building in five, seven such malls. So that is the head people when they come to shop the cars are charging like here in geo geo mall here in BC. Imagine a massive charging and flow facility coming up there so when people show up they can also so finding key locations converting them is great for the developer Because the developer or the or the mall owner can also enjoy extra revenue coming in, you can monetize that asset, which is anyways a light, empty asset to allow cars to charge. And by bringing additional energy connection so we fundamentally believe that that's a huge opportunity. That's the next big opportunity to set up charging infra.

Sonia Shenoy: Okay, well, this was a very, very interesting conversation for me. Thank you so much for joining us on the show, and all the best with all the fundraising that you're doing hope you double your capacity, as you've been, you know, talking about that your guidance right to go from 5000 EVs to 10,000. Over the next one year,

Punit Goyal: We should be at nearly nine and a half 1000 cars by March. Hopefully everything goes well. We have money in the bank to go to 30,000 cars for December next year. So that's the goal to scale to 30,000 cars across three cities in India and overseas by December of 2024. But our short term midterm plan is by March of 2024 to be nearly nine and a half 1000 gods and you didn't answer about your listing plans. Yeah, so absolutely on the card. So capital you need to decide where should come from, at what cost, the capital should be sustainable as they building a sustainable mobility company. We also want sustainable capital to come in. And till such time we'll be able to raise sustainable capital from from institutions will keep reading when listing is obviously of great validation of a good company. We also getting a lot of consumer love from lots of retail customers who use BluSmart so they love BluSmart and and my LinkedIn inbox is full of messages saying that how can we invest in your company? How can we invest? And I see that but these investors should be given an opportunity although they can't write checks for millions of dollars, but they all want to be a part of the BluSmart group. So the best way to do it is to list on the exchange Exactly. Then they all can participate all these millions of customers who today are enjoying the BluSmart service. They will all be a part of the growth story bluesman by by investing, doing holistic,

Sonia Shenoy: Alright, it's great to watch your journey and congratulations once again and all the best.

Punit Goyal: Thank you so much. Thank you.