The automotive industry is on the cusp of an energy revolution, and nowhere is this transformation more significant than in the commercial vehicle (CV) sector, which has long been dominated by diesel. Blue Energy Motors (BEM), a Mumbai-based CV manufacturer, is boldly positioning LNG (Liquefied Natural Gas) as the future of green fuel in CVs, charting an ambitious path for a sustainable and profitable future.
BEM has celebrated its one-year anniversary, and it’s not just any milestone. It marks a year of groundbreaking operations as the first and only player in the LNG truck market in India. With a clear vision, BEM is looking to achieve a turnover of approximately $800 million by 2026-27, provided it successfully reaches its target of producing 10,000 trucks annually within the same time frame.
The company’s production capacity is aligned with its goal; it has the capacity to produce 10,000 trucks annually at its state-of-the-art plant located in Chakan, near Pune. In its inaugural year, BEM has already sold over 250 trucks, and as it enters its second year of operations, the future looks even more promising, with an order book filled with more than 1500 trucks scheduled for delivery in the next 12 months.
Challenges and Triumphs in Year One
The journey of the first year was not without its challenges. Anirudh Bhuwalka, CEO of BEM, reflects on the initial hurdles the company faced: “The perceived risks when we started out were very high. Will LNG be available? Will the supply chain support? Will customers adopt? Will the truck deliver a demonstrable performance? Will it deliver the pollution advantage?”
Despite these early uncertainties, BEM persevered, and with a year of operation under its belt and a cumulative distance of 3.3 million kilometers covered by its LNG trucks, the company is armed with solid evidence supporting its new fuel technology. Bhuwalka passionately asserts that the environmental benefits of LNG are profound, stating, “The delta between LNG and diesel is only 10% in terms of pollution. We beg to completely differ and we will demonstrate it by facts that the delta between LNG and diesel, based on CO2 alone, is 40%. In Nox, it is 91%. In PM, it is 90%.”
However, challenges loom on the path to widespread adoption of LNG trucks. The rising cost of natural gas could narrow the price gap between LNG and diesel, potentially affecting adoption rates. Additionally, the dearth of LNG infrastructure, with only five dispensing stations in India, presents a considerable obstacle.
The limited availability of LNG is a hurdle BEM intends to overcome. The company follows a direct-to-customer sales model and plans to expand its company-owned service network in tandem with the growth of the LNG dispensing infrastructure. Currently, BEM’s trucks operate within a radius of about 600-1000 kilometers from an LNG station. Bhuwalka is optimistic about the expansion of the LNG network, envisioning his trucks crossing the country within 12 to 24 months.
The affordability of LNG trucks is another issue. While LNG boasts superior fuel efficiency compared to diesel due to its higher calorific value, the cost of cryogenic tanks required to store LNG is a significant contributor to the price difference between diesel and LNG trucks.
However, the economic advantage of LNG shines through when considering fuel efficiency. Bhuwalka notes that BEM’s trucks, equipped with 1000-liter tanks, can travel 1200-1400 kilometers on a single tankful, delivering over 30% better fuel efficiency than equivalent diesel trucks.
New Technology, New Business Strategy
BEM is more than just an advocate for LNG; it represents a new era in the commercial vehicle industry. Leveraging technology advances such as telematics, 4G networks, artificial intelligence, and machine learning, BEM’s trucks have transformed into smart vehicles. Historically, trucks were viewed as “dumb machines,” but BEM’s trucks collect 120 data points every 1/100th of a second, enabling the capture of driver behavior, engine performance, and overall vehicle performance. This data empowers the BEM team to enhance uptime, optimize fleet performance, and offer advisory services to customers, helping them maximize their return on investment.
BEM has also adopted an innovative approach by being asset-light. This flexibility aligns with the changing times and the rise of technological disruptions. Bhuwalka highlights the capex-light, flexible, variable, and scalable nature of the new business models being implemented. For instance, BEM’s ‘smart factory’ model allows a factory like the one in Pune to be built in just 3-4 months within a warehouse of around 100,000 square feet.
A Diversified Portfolio for the Future
As organizations increasingly opt for cleaner transportation options, BEM plans to offer multiple technology options in its portfolio. Recognizing that a one-size-fits-all approach is impractical, BEM is preparing for the future. Bhuwalka emphasizes the importance of agility and cost-effectiveness: “You cannot bet on one technology and hope to win. You have to be technology-ready across the board and let the market decide how it’s going to work.”
BEM’s future plans include entering the electric vehicle (EV) space within a year, followed by the introduction of trucks featuring hydrogen technology. Bhuwalka emphasizes that the company’s focus will remain on heavy-duty trucks, a segment that accounts for approximately 20% of the Indian truck market. Currently, BEM offers 46-ton and 55-ton trucks in its portfolio.
In an industry where word of mouth plays a significant role, delivering on promises will be pivotal, especially since LNG trucks come at a higher price than their diesel counterparts. BEM’s 55-tonner, for instance, is priced at INR 62 lakh, which is approximately INR 25 lakh more than a diesel 55-ton truck.
Blue Energy Motors is ushering in a new era of green transportation in the commercial vehicle sector, with LNG at the forefront. Their commitment to technological innovation, smart solutions, and an agile business model positions them as a transformative force in the industry, shaping the future of clean and efficient trucking in India and beyond.
