BluSmart Mobility, a pioneering all-electric ride-hailing service, is undergoing significant operational changes to enhance its financial health. With a monthly revenue of Rs 70 crore, amounting to an impressive annual run rate of around Rs 840 crore, the company is strategically revamping its fleet management. Co-founder Puneet Singh Jaggi shared insights about these developments during a recent conversation.
Strategic Changes in Fleet Management
A major element of BluSmart’s restructuring involves Gensol Engineering, a partner company, which is terminating its current leasing agreements. Gensol will be selling 2,997 electric vehicles to Refex Green Mobility, based in Chennai. Refex will then lease these vehicles back to BluSmart, ensuring continuity in operations.
- No Impact on Fleet: Jaggi confirmed, “This transaction will not alter the fleet in any way. The financial challenges faced by Gensol will not affect BluSmart’s operations. Our goal is to lessen the financial burden on Gensol, and this sale is part of that strategy. Our fleet will not only remain intact but is also set to grow over time.”
Details of the Refex Deal
The agreement with Refex encompasses about 37% of BluSmart’s total fleet of 8,000 vehicles. Refex will assume control of Gensol’s outstanding loan of Rs 315 crore. This restructuring follows the downgrade of Gensol’s borrowing status to default by two rating agencies earlier this month.
BluSmart’s operational fleet predominantly includes electric vehicles from manufacturers like Tata Motors, Citroen, and MG Motors, with a small percentage sourced from Gensol Engineering. Despite these financial adjustments, the company is steadfast in its ride-hailing business and growth plans.
Financial Performance Insights
Recent figures from Tracxn reveal that BluSmart’s revenue surged to Rs 70.9 crore in FY23, a significant increase from Rs 8.1 crore in FY22. However, net losses also escalated from Rs 100.4 crore to Rs 215.9 crore in the same timeframe. Jaggi affirmed the company’s ambition to achieve profitability within the next 6 to 8 quarters.
Innovative Vehicle Acquisition Model
BluSmart is diversifying its vehicle acquisition strategy with the introduction of the “BluSmart Assured” leasing program, launched last year. This initiative allows high-net-worth individuals and investors to lease electric vehicles directly to BluSmart. So far, nearly 1,000 cars, valued at around Rs 150 crore, have been integrated into its operational fleet.
Keeping Pace with EV Technology
In addition to expanding its fleet, BluSmart is closely monitoring advancements in electric vehicle technology. Regarding Gensol’s newly released two-door, two-seater EVs—Ezio and Ezibot—which have garnered 30,000 pre-orders, Jaggi clarified that BluSmart accounts for only a small portion of these orders, with the majority coming from various third-party buyers. These compact EVs boast an operating cost as low as 50-60 paise per km, making them up to 80% cheaper to run than traditional petrol vehicles and offering a 200 km range on a single charge.
Focus on the Indian Market
When discussing international expansion, Jaggi emphasized that BluSmart’s primary focus remains on the Indian market. “At this stage, we are dedicated to effectively penetrating the Indian market and meeting the needs of our customers before exploring opportunities elsewhere,” he stated.
Clarification on Acquisition Rumors
Jaggi also addressed recent speculation regarding potential acquisition talks with Uber Technologies due to Gensol’s financial pressures. He firmly stated, “There are no discussions happening with Uber, Everest Fleet, or any other potential acquirers.”
BluSmart Mobility is not just navigating financial challenges; it is positioning itself for sustained growth and innovation in the burgeoning electric vehicle space. With a clear focus on fleet enhancement and customer satisfaction, the company is set to drive forward in the ride-hailing industry.
