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Changing the EV ecosystem - the Three Wheels United way
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Changing the EV ecosystem - the Three Wheels United way

November 16, 2020

Kirti Manian [01:01]: Hi Cedrick, thank you so much for coming on the show. I am going to get started by asking you this. Take us through your career path. It feels like you have taken a few turns on the roads before heading Three Wheels. We would love to know more about your journey.

Cedrick Tandong [01:15]: Well about my journey. First, well I am born Cameroonian, thirty-two years of age. I lived in Cameroon until post my first degree. And then in between somewhere I think my first visit to India was in 2008 while I was visiting the country and studying a bit of IT. Then post that I moved to France. I had an opportunity to come back to India to work as management consultant for a French company that was outsourcing its market research division. I spent about two and a half years in India, and then post that went back to France, completed my masters from business school and, for about a year in France in a very interesting I would say company that was picking up ideas from university labs, creating patents out of them and either selling those patents or creating standalone businesses. 

And somewhere in between that my entrepreneurial spirit kicked in, and I left my job one day and moved back to India and that is how Three Wheels came about. So, I have been in India since 2014 this time. So, quite a while in India riding on still with Three Wheels United.

Kirti Manian [02:30]: Oh, that’s brilliant. Tell us more about Three Wheels United. What is the basic premise behind your company, what kind of challenges did you face when you kind of kicked off, was fundraising a problem for instance?

Cedrick Tandong [02:41]: Well, Three Wheels United has I would say one primary mission and a secondary mission. It’s primary mission is to convert all light vehicles to electric, and so, reducing pollution. But we are very conscious that a lot of the operators of these light vehicles, low income, low literate population. So, the side mission is that we create a business model that supports these people financially as they transition to driving electric vehicles. Our intention is to start this in India and then export it to different parts of the world that requires it.

Three Wheels united does this by financing, I’d say alternatively financing the transition to these electric vehicles. We have built technology that makes, I would say, the high touch lending model of micro finance institutions into a low touch which makes it very profitable and very efficient. And with this model we are deploying capital in the market, facilitating that transition to electric vehicles. So, that’s primarily what we do.

The way we see ourselves is that we are an ecosystem builder. So, we have partnerships with manufacturers. We leverage on the government schemes that exist. We have partnerships with charging and battery swapping companies, we have partnerships with ride hailing companies to provide work for our drivers. And what we do is we build the technology to connect all of these partners together and we finance the growth. So, that’s a bit of what Three Wheels is all about.

Kirti Manian [04:18]: And what kind of challenges did you face when you kicked off?

Cedrick Tandong [04:23]: Like every small company, when we started, we faced typical challenges. So, one is market acceptance. I think we brought in a very new product. So, market then had not yet seen electric vehicles. I think that market is still not yet mature, so, there is, that challenge is still persistent. 

Secondly, we are operating in a space that has, I would say over 90% of vehicles deployed on road through financing. And the majority of the drivers who drive these vehicles wouldn’t say have created savings in the past. But we still have our financial systems which are demanding these drivers to contribute maybe 30% upfront cost for these vehicles, right. So, this becomes a challenge even in taking up these assets. Those are what are market challenged I’ll say. 

And then from a company perspective, I was new in an Indian environment. So, I had to learn quickly what to do to make the dream come true in that environment. And there are all sorts of challenges in that. And then just operating in India has its own challenge as well, one which also counters because the market is extremely big. On one side you have challenges that once you crack it, then you have access to quite a large market. So, these are a bit of challenges, some of them still persist today and it’s the things we are still trying to solve.

Kirti Manian [05:49]: And so, have you learnt the term ‘jhol’ (fixing) and ‘jugaad’ (make-do)? [laughing]

Cedrick Tandong [05:53]: [Jugaad].

Kirti Manian [05:53]: Typical Indian terms where [laughing]…

Cedrick Tandong [05:56]: Yes. Well, I have not polished my Hindi and Kannada yet. The way I say it is, when I first moved to India, I started learning Hindi, Kannada and Tamil at the same time and then messed it all up. So, I was making one sentence with three languages inside. But now I am picking up on Hindi. But yeah, that’s the business environment I live in. So, yeah, it’s fun. 

Kirti Manian [06:19]: Can I ask, are you based out of Bangalore and therefore, are you looking only at Bangalore in terms of expansion? Sorry, I am running a little bit ahead in terms of my questions. Are you looking at expanding into other cities or is Bangalore kind of the base for now?

Cedrick Tandong [06:34]: The company’s headquarters is in Bangalore, but we have already expanded in multiple cities which are out of Bangalore. We have had small trials running in Hyderabad, in Chennai, up north in Uttar Pradesh, we have had partnerships in Delhi, doing a bit of trials there. So, we are in this space to go pan India. Of course, there is a growth plan that we are following. So, we are not just going to jump into every state at any point in time.

But if you also look at it, Indian states are rapidly moving towards adopting their EV policies and there is, one part of it is adoption and one part of it is actually executing on these EV policies. So, we are looking at states which are forward thinking so that we can create a better story there to tell everybody else and facilitate the movement, the shift to electric vehicles.

Kirti Manian [07:23]: In a report from 2020 March, I happened to read that Three Wheels is trying to finance 10,000 electric autos in the city over the next year, then hit a target of one lakh orders by 2024. And do you also plan to expand into other vehicle segments?

Cedrick Tandong [07:36]: So, our category is light electric vehicles which will include, whether it’s cargo, especially today with the COVID pandemic situation where a lot of people are working from home and there is a high demand of goods delivery at home. So, we are looking, this is the market well, the unit economics works pretty much around the same to passenger vehicles. So, it’s just going to be a different variant. Beyond that as well we are thinking right in the future, we are also going to look at two wheelers. But that is a space we are not touching yet, we are still talking to some people to see what unit economics are there. 

But yes, you are completely right. Our target is 10,000 vehicles. We are building the, I would say the financial capacity to that. We are actively fundraising for those number of vehicles. We have a plan which just remains as aggressive as it was pre COVID. And yeah, we are looking forward to delivering on that.

Kirti Manian [08:32]: You answered my question. I was going to ask you has COVID affected the plans, and if it does not appear to have, which is fabulous, I think.

Cedrick Tandong [08:39]: In terms of numbers and if you look at the market in general, the Indian market has remained quite bullish in EVs even with the pandemic. I think it’s a good time to make a shift because we have had I would say change in behaviour. But that behaviour also showed us that we needed a planet which is greener, not by making every car stop working, but rather by changing these cars to greener ones. So, I think the case is very clear. A lot of the players are still bullish on it. There is a bit of, I would say instability if you look at it from a financing perspective. Financiers are still a bit holding back to understand a bit the impact of the pandemic before they start dispersing capital. But all of these reasons are things why we are still on our target. We might vary from one vehicle variant to another, but then the overall goal remains the same. 

Kirti Manian [09:29]: That’s fabulous. I’d love to hear about impact now. What kind of impact have you had with Three Wheels United. And you have multiple types of businesses right from financing to vehicle supply. It would be great to hear some examples please.

Cedrick Tandong [09:41]: Well, so, if you look at impact, we look at impact from the highest level to matrix. So, we are targeting a lot of drivers who are renting their own two stroke vehicles. These vehicles would contribute to about sixty photons of CO2 during their lifetime. By replacing you know these vehicles we are assuming by default that we are saving that amount of CO2 from being released into our cities.

Beyond that we also look at the earning capacity of drivers. So, because of the low operations cost of these vehicles and the positive financial benefit from rental to owning, the drivers more than double their income. So, from an impact perspective on the highest level, those are the two things that we measure. And then when you go down into it, you would see that it’s a matter of creating jobs, it’s providing livelihood to drivers and their families, giving cleaner air to our citizens in whatever city we are deploying these vehicles. So, that’s where the impact stands today. And we are an impact first company. So, we measure all of these things and it’s the reason behind why we do what we do.

Kirti Manian [10:48]: That’s great to hear. I also read about your app launching in September 2020. Tell us more about this as well please. 

Cedrick Tandong [10:54]: Oh yeah. So, this is something which has been in the pipeline. So, if you look at Three Wheels was a community based, has always been a community-based organization. While we finance over 3000 vehicles, we have over 30,000 drivers in our community which we help either by helping them get documents, we prepare them for financing, we interact with their families at different levels. So, it has always been our plan to take out that interaction from in-person into a digital platform. COVID gave us an opportunity. I would say yeah, sometimes life throws you a lemon, you have to make a lemonade out of it.

Kirti Manian [11:31]: Yeah.

Cedrick Tandong [11:32]: So, COVID gave us an opportunity to move interaction to a digital platform. So, we, I’d say had an amazing job to my tech team who quickly turned around this project within a month and we had a live platform up and running, over 10,000 downloads already who are mostly drivers from our community. Yeah, we are going strong on that as well. So, our interactions today whether people want to get a loan, whether they want to have some documents, they could see different charging stations or charging points, service points et cetera, et cetera, all on this app. 

We are going to aggressively push the app, this is specific for drivers. So, there is a whole registration process. I urge people who are not drivers not to download the app, but if you have any person who are drivers to download and register on it because there are a whole bunch of services they can benefit from. 

This is how we see the future. I guess that's the new normal. We are going to push this up to our drivers, use that to help them in whatever way we are delivering our services to them, and that will be a platform to connect to drivers.

Kirti Manian [12:36]: That sounds amazing. I love that there is a whole infrastructure actually built on the app right…

Cedrick Tandong [12:40]: Yes.

Kirti Manian [12:40]: … where everything from just connections being built & having the right services really. That’s amazing, that’s actually amazing Cedrick. 

I’d love to know now about how politics and policy have played a role in the growth of your company, what more does the government need to do to help you and others like you in terms of policies or programs.

Cedrick Tandong [13:03]: First to start, I think the Indian government is doing an amazing job if you look at it. I think it’s one of the forward-thinking governments when it comes to making electric vehicles a reality. The implementation is always more trickier than putting policies in place. But there is always much more we can do. Our role in there is also to help the policy makers make the right decisions I would say.

So, if you ask me what does the government need to do, I would say that today there is a lot of focus around, whether it’s battery swapping or battery charging that is going to, I’d say take over the market. While we have modelled, modelled from real life scenarios that battery swapping at scale would be the most efficient way of operating electric vehicles. But then, given the type of market we are operating in, you probably need to start with charging and then slowly from peer to peer charging and then migrate into swapping. So, I think while the government is considering allowing private players to play whatever role they have to play, there is challenges around standardization. So, different players who are using say the same types of chargers and things like that, because it would allow multiple vehicles to leverage on whatever infrastructure has already been created rather than each individual creating their own infrastructure for their specific vehicles, which makes it a challenge even for financiers to finance, because what if that company goes out of existence.

So, I think there is a lot more to be done there. There is still some governments who are creating their EV policies, it is really to push on those and get them operational as soon as possible. And that would create a conducive environment for players like ourselves to come in and do our best to facilitate that conversion.

Kirti Manian [14:51]: Are there any particular governments, state governments for instance, that you think you can single out and say they have been really the most forward ones of the whole lot?

Cedrick Tandong [14:59]: Well, Bangalore has always been forward thinking on all of these things. Karnataka had it’s policy, EV policy almost two or three years ago. Well, we’ve, proof of the fact is that we have deployed vehicles in the city and got these registered. This is not seen in all states, but I would say it’s work in progress right, there isn’t any state to single out or not to single out. We are running the same race here; it is the same target I would say.

Kirti Manian [15:27]: Right, okay. And is there awareness in the media about the work that you do, and does there need to be more in terms of PR or press or just awareness in general?

Cedrick Tandong [15:38]: I think that is the big thing which is lacking. I think awareness both, on the consumer and users of these vehicles right. Because if a driver is convinced that getting an electric vehicle means that he is going to get more rides or more people choosing him on road than his non-EV counterparts. All of that has to happen through awareness.

And then I also think it’s about convincing the mass to join the movement right, because the only way to do it is that you have more stories coming up, people talking about if they were earning more, coming out and talking about the stories, and then the press picking it up, I would say more and more people. So, you get more people to adopt, and because they adopt you get more stories and that’s how you push them often. There is a clear need for more to be done, I would say awareness.

Kirti Manian [16:28]: What have you as a company, have you done any kind of awareness campaigns in that sense?

Cedrick Tandong [16:33]: Yes. We have done a lot and, well, we have a whole PR firm working on creating awareness. We do marketing activities with our vehicle manufacturing partners in different cities. We talk to customers. So, there is a lot that we are doing. But there is, I think it’s not a Three Wheels United problem alone, it’s an ecosystem problem, it’s probably the world’s problem that we need to push adoption of electric vehicles. We just can’t do it all by ourselves. I think the more people talking about it, the better it goes and the quicker we move to adopting clean light electric vehicles.

Kirti Manian [17:13]: Thank you for that. So, you are a 2020 Henry Arnhold Fellow via the Mulago Foundation. Tell us more about this please.

Cedrick Tandong [17:21]: Yeah, I was very happy that Mulago Foundation chose us for this. They are very prestigious I would say organization. They give you a hundred thousand dollars.

Kirti Manian [17:33]: Congratulations!

Cedrick Tandong [17:34]: Thank you very much, yes, it’s very handy. [laughter] They give you a hundred thousand dollars grant without any restrictions which helps the business as ours, because we always need different types of capital, be it market capital but also financial capital to de-risk the market based on the market capital. Yeah, personally I am proud, I am very happy that they brought me into the program. I met some very amazing people working on different solutions to reduce CO2 in different industries across the world. I think I really hope that the world has more and more programs like that with very good mentors but also very good backing to support organizations such as ours.

Kirti Manian [18:20]: Congratulations on that. I would love to know more about how India has been an experience for you. I know you came to India in different parts of your life and in that sense, you have been here for almost ten plus years in different parts. Any significant challenges?

Cedrick Tandong [18:34]: Well, I grew up in a world where I find it very interesting to solve challenges. So, I think I look at it from a very different perspective. But just to talk about India, I think India has been home to me like you rightly mentioned for over ten years now. I have enjoyed the culture, I have travelled a lot, I have learnt a lot of things. But more importantly to me it was where my entrepreneurial journey really started. I saw India when a lot of what was happening in India was consulting services before Ola even existed. And then I saw India through the transition of creating its own companies for Indian services and I learnt a lot about that. I learnt a lot from my peers, I learnt a lot just being in the country. And of course, just like in every country and every market, you will have challenges, but that’s, as an entrepreneur that’s what makes your day exciting. I am really happy that I haven’t had the same day ever since I started Three Wheels United and I look forward to more of it.

Kirti Manian [19:35]: That sounds brilliant. You have talked about building a for-profit social enterprise “being no walk in the park”. That’s your words, I think it’s how you have described the whole experience. So, what advice would you give to young entrepreneurs who are interested in starting up?

Cedrick Tandong [19:50]: Well, I think first of all you need to believe in your idea, you need to be original. Keep it simple and offer a service that has value to people. If I just think of it off my mind, those are the quick things that I will tell somebody. So, a bit of my side right. I came from a management consulting background, purely for-profit mindset where everything was results--driven. But if you are trying to build a business that creates a value to a certain extent, I think there is a lot of patience that needs to be exercised. There are different rules of engagement. You are going to be operating mostly with a low income population and possibly low literate population/ So, the speed at which you are going to do things might not be that fast. But I trust that the results would be way more gratifying than any other sort of business you can create. So, I would say to young entrepreneurs that don’t give up, stay on your passion and you will be rewarded.

Kirti Manian [20:55]: Thanks so much for that. And now to my last question. You know this is something I ask all my podcast guests at the end. We have this issue of climate change coming from your background and you know, your experience with Three Wheels as well. What would your call of action be to our listeners?

Cedrick Tandong [21:13]: To your listeners. I think it’s multi-fold. There are people who are investing in such businesses. I think they need to be patient and diligent because there is a hype around climate change I would say. Which means you have a whole bunch of ideas which, and so, not every idea is worth spending time on. So, I think investors should be diligent and look into the things that really create value. To enthusiasts, I would say there is a lot out there happening. It takes a lot to start something than to think about an idea. So, whatever the idea is, just start it and start running. And then to users of I would say electric mobility, please do support the ecosystem as much as possible, mostly the drivers, they need it. That would be my words to your listeners.

Kirti Manian [22:11]: Thank you so much Cedrick, we have had a lovely time talking to you and we have learnt so much about what Three Wheels is up to as well. And we wish you the best of luck for taking the business forward. Thanks so much for your time, we appreciate it.

Cedrick Tandong [22:22]: Thank you very much Kirti, have a lovely day. 

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