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Indian Electric Car: A First, But Not Yet A Winner

As one of India's key technology hubs, the city of Bangalore boasts its share of firsts: the first Indian city to get electricity and the first to see a car. It is also the first and only Indian city to manufacture an electric car. The problem is, not many people are buying them. But industry analysts predict that situation is bound to change, especially with surging oil prices. Raymond Thibodeaux reports from Bangalore in southern India.

Anand Mahesh is a salesman for the Reva Electric Car Company, the first and only electric carmaker in India. He enjoys taking his customers on test drives on the crowded streets of Bangalore.

Reporter: Let's go head and see what it sounds like to start.
Mahesh: It's on.
Reporter: It's on? It's very quiet.
Mahesh: Of course.
Reporter: We're going into traffic. Does the horn work pretty well?
Mahesh: Of course. Do you want to try it?

The horn is good and loud, an essential asset when driving in India.

Mahesh says one of the first things people notice during their test drive of a Reva is its rate of acceleration. It is surprisingly quick for such a small car. The next thing they notice is its dent-free body, unusual for cars in India. Mahesh happily demonstrates the car's dent-proof exterior punching it with his fist.

The Reva Electric Car Company, a Bangalore-based carmaker, has been manufacturing electric cars for seven years. Their latest models range in price from $8,000 to $12,000. They go about 80 kilometers on one charge, slightly less if one runs the air conditioner. They require very little maintenance, mainly because there is no engine.

No engine means no exhaust. That is what prompted many Indian states to offer huge tax incentives for those buying electric cars, especially in the bigger, smog-choked cities across the country.

"It is a very positive step, with pollution being what it is today and the concerns we have, with over 50 percent of our pollution coming from the transportation industry," said Chetan Maini, Reva's deputy chairman and chief technology officer. "If we really want to change that, we have really got to change it using electric vehicles."

So far, Reva has sold about three-thousand electric cars. About half of those sales have been in Europe. Sales in India have been somewhat sluggish, even in forward-looking cities like Bangalore, one of India's key technology hubs.

Part of the problem is that electricity here - as in much of India - is unreliable, with frequent scheduled and unscheduled blackouts.

Maini says the Reva is designed for city driving, basically short distance trips like running errands or shopping. He says the Reva makes an ideal second car. That is a big problem in this fast-developing country of 1.1 billion people, most of whom make less than $2 a day. Most Indians still cannot afford their first car.

But Maini says that as India's economy thrives and fuel prices rise, more and more Indians are considering electric cars. In the past few months, he said Reva has seen a robust increase in sales.

"People take some time to understand new technologies, especially when you're the only player," he said. "People are waiting to see how this industry matures. But I think the industry's changing and the market conditions are changing. It's slowly moved into that area where people are saying, 'Hmm, let me just consider an electric car.' And that already is very big step."

For now, Reva is gearing up for potentially stiff competition from Tata Motors, another Indian carmaker set to launch its first electric car next year. Tata made headlines earlier this year as it rolled out the world's cheapest car, the Nano, which, at a quarter of the price of the Reva is within the reach of India's growing middle class.

Some car analysts speculate that Tata might figure out a way to mass-produce an electric car that, like the Nano, won't put too big a dent in one's wallet.