Amit Gupta remembers the day he got a cold email from someone at Magna International in the US nearly a year ago.
“He said he was a fellow Bangalorean based in Detroit and wanted to talk to me,” narrated the Co-founder & CEO, Yulu, the start-up which is into shared electric mobility-as-a-service. It was this conversation that paved the way for a series of discussions with the top management at Magna.
“We spoke about forging a deeper partnership and that is when I flew to Detroit to meet Swamy Kotagiri, the CEO, and his leadership team. I was fascinated to hear them speak about their vision,” continued Gupta.
More trips and talks followed after which the American automotive ancillary supplier then made a $77 million investment in Yulu. Bajaj Auto, another Yulu ally, also invested in this round of funding which will see an all-new powerhouse emerging in the electric mobility space.
“From my point of view, this story is not different from Bajaj Auto where there is someone like Rajiv Bajaj at the helm. Likewise, Magna has an exceptional professional in Swamy Kotagiri with Indian roots and who has risen within the system to become CEO,” said Gupta.
As he puts it, Yulu needed Bajaj Auto to create an outstanding and world-class scooter but “even this needs an energy source” in the form of battery and charging infrastructure. “For us to be scaling business to the next level, we need one more hand for the energy future,” narrated Gupta and this is where Magna will play a key role going forward.
The company is going to build the charging/ swapping system across India and with its “deep manufacturing excellence”, Gupta is confident that the growth story is now on track to fit in with the overall vision and strategy. “For Yulu, the two important legs are in place: scooters will be handled by Bajaj Auto and Magna will help out for battery/ charging systems,” he said.
A Perfect Alignment
According to him, Magna has a powerful vision on mobility and India will play a big role given its immense potential in the electric two-wheeler space. “Yulu becomes the natural starting point along with India. It is the perfect alignment with Magna’s vision,” says Gupta.
Literally, thousands of hours went into putting together this partnership and it was amply clear during these talks that despite the bloodbath happening in the VC arena with valuations being stripped, Magna was determined to go ahead given its long term view of India’s mobility landscape.
The valuation was more than satisfying and Gupta is especially pleased given that “a small company like Yulu with big dreams has two formidable names in Magna and Bajaj Auto”. Over the next couple of months, there will be “some big things happening” once the partnership is in place.
Magna’s optimism about the opportunities ahead is reflected in what Matteo Del Sorbo, Executive Vice President, Magna International and Global Lead of Magna New Mobility said after the Yulu deal was done.
“This is an incredibly exciting time for Magna to contribute to a sustainable future in urban mobility through this investment in Yulu. Micro mobility presents a great opportunity for additional growth for Magna, and joining forces with Yulu helps us expand our business into this rapidly growing sector.”
Another interesting aside in this story was when another Magna employee in Detroit called up his mother who lives in Bengaluru to ask her if she had any idea what the Yulu brand was about. “She said she remembered the blue bike which she saw on the city’s roads. This was incredible and became a big testimonial for her son,” laughed Gupta recalling the episode.
Magna’s Commitment
Magna’s commitment to electric mobility is evident from Swamy Kotagiri’s message to shareholders in the company’s 2021 annual report. “About 90% of our 2024 sales are already booked, and our engineering investments in megatrend areas such as electrified powertrains are expected to increase,” he had said.
Kotagiri said, “Today, a large portion of our engineering projects are related to the growing EV market. In addition, we are investing in ADAS and software, areas which will define a large part of the vehicle going forward, and we continue to look at the car of the future from a holistic view.”
“We are poised to capture opportunities in mobility with our systems approach, our powertrain offerings that are accelerating the transition to EVs, and our unique complete-vehicle capabilities. From top universities to traditional customers and exciting new entrants, we are collaborating with innovators across the entire mobility spectrum,” said the Magna CEO.
Magna’s 2021 annual report also highlights some of the important initiatives made in the electrification arena. These include:
- Completing a joint venture transaction with LG to manufacture e-motors, inverters and on-board chargers, as well as complete e-drive systems for certain automakers.
- Winning two additional integrated e-drive programmes, including both primary and secondary drive systems as well as being awarded a new programme from Daimler for a family of dual-clutch transmissions, including hybrid variants.
- Launching the first battery enclosures business for General Motors on a new electric vehicle model.
Beyond these, the global shift to electrification has also fostered the emergence of a number of new EV-focused OEMs and Magna has indicated that it will pursue these opportunities to grow its business.
Interestingly, it has reached the “second milestone” in the tie-up with Fisker Inc in signing a long-term manufacturing agreement. This will see the production of the Fisker Ocean SUV at the Magna assembly facility in Graz, Austria. Manufacturing is scheduled to begin in November this year.
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