Strom Motors Overview
What are you working on? Can you give us a brief overview of your company?
Strom-R3 is a compact, cost-effective EV designed for cities and the developing world. Priced at under $10,000, Strom-R is perfect for personal and shared mobility needs.
What about you? Tell us a little bit about yourself and what inspired you to start this journey :)
After receiving my Master’s degree and working for several years in Washington DC area, I moved back to India to follow my passion for democratizing clean energy solutions where needed the most. I founded E14 Technologies with Jean-Luc who is a great friend and was also my CEO when I was working in US. We both believe humans can make large scale impact when armed with the right technologies. Towards this, we worked with major solar energy companies to help them develop and deploy clean energy solutions, which are now deployed in over 30 MegaWatt solar power plants in India and neighboring countries.
Strom-R3 started as an internal RnD project within E14 Technologies, focused on exploring, from a unique angle, something major automotive companies were failing to do – to build electric vehicles that were affordable by the masses and met their daily needs.
What's your background? What is the unfair advantage that will make you succeed in this industry?
Our combined background of working on cutting edge technologies and rapid integration gives us a unique perceptive on taking first principle approach to listen to end customers and deploy the right product.
Compact 2-seater mobility segment around the world is just getting started. With its unique reverse trike design, Strom-R3 provides the right balance between comfort and easy mobility in city traffic. The Strom-R3 offers an air-conditioned cabin, front and rear storage areas, and accurate range estimation AI engine. The large luxurious sunroof makes the driving experience open and enjoyable.
Given its compact size and light weight, Strom-R3's platform offers best-in-class fuel efficiency with cost per mile 2.5x lower compared to a Tesla Model 3, and 7.5x lower than a Toyota Corolla. Strom-R3 also takes up almost half the space of a typical car, thus providing unmatched space efficiency and enabling a fleet to reduce its real estate footprint by 2x.
The Business Model
What is your business model, and who are your customers?
Our primary revenue source will be vehicle sales. Initially we plan to target share mobility platforms and fleet operators. To that effect, in Jan 2020 we got a wonderful opportunity to showcase Strom at CES2020 in Vegas. We met founders from some of the leading shared mobility platforms from US, Germany and Chile who showed great interest in Strom-R3. While talking to them, we learned that their consumer base usually uses electric scooters or e-bikes for 2-3 miles commuting but for 5-10 mile journeys they opt for taxis etc. Adding a compact car which takes up half the space compared to other cars and provides comfort and safety lets them offer total solutions for urban mobility to their customer base at extremely competitive pricing. Some of these discussions are at an advanced stage and to close some of these deals, providing demo vehicles and working on technology integration is required. We plan to execute these in the next 6-9 months.
Did you already find a product-market fit? How do you acquire and retain your customers?
We started our pre-booking for two cities in India(Mumbai and Delhi) in February, 2021 where customers had to deposit 2% (Rs.10,000) of the car price. These confirmed purchases now total over $1M (order in hand)
Along with these, we have received $10M+ (over 2000) of pre-order interest from other major cities in India including Bangalore, Pune, Hyderabad, Chennai etc. We are maintaining a priority list for these customers but are only accepting booking deposits from customers from Mumbai and Delhi. We expect to ramp up manufacturing and deliver cars to these customers in the next 18-24 months.
Also, Strom is one of the only platforms to use swappable batteries, resulting in 5 minute self battery swapping for 24x7 fleet operations. The onboard electronics are designed in-house to track all moving parts on the vehicle, which helps predict failure and avoid breakdowns. Strom-R3 is a perfect solution for shared mobility fleet operators around the world.
How big is your operating market? Could you provide some independent research/insights?
Market Size: $138B shared mobility market (Source.)
What's your competitive advantage, and how are you going to build a sustainable economic moat?
Large fleets of electric cars face one daily hurdle - charging EVs at peak business hours is expensive (as it requires space) and results in asset downtime. Strom-R3 is one of the few electric vehicles offering a battery-swap option for fleet operators. Cars can be back on the road within 5 minutes, thanks to self-operated battery-swap stations placed strategically across the city. This can result in 40% additional uptime and reduce costs by another 20%.
Strom Motors is also developing a cargo variant built on the same platform using 70% common components which will offer unmatched ease of access in low footprint design with one of the lowest cost per mile offering perfect for both the North American and European markets. We plan to showcase this variant towards the end of 2021 at major auto shows and start partner test programs in the middle of 2022.
Who is on your team? Is there a fun story behind it? If so, We'd love to hear more!
Strom-R3 is born out an internal RnD project run by the founders and a few employees in 2016 where the team was looking at growing trends of shared mobility combined by the fundamental shift in automotive propulsion from oil to electric. What started as a fun welding exercise to give form to an idea, soon started taking shape. Due to lack of funds and absence of clay modelers in Mumbai, I called in my mother-in-law who is an art teacher to fly from Delhi to Mumbai two weekends in a row and work with our team to make our first clay model of the car. To this day, that first scanned model of 1:12 clay is the reference for our car design.
Where do you see you 5-10 years from now? What's your exit strategy?
We see ourselves as more of a technology company than an automotive OEM. Our IP and innovation is concentrated towards the main Vehicle Control Unit(VCU), battery management and insight generating AI engine which enables us to compete and lead on several fronts. Every car rolling off the production line, is drive-by-wire enabled and is upgradable to automated driving capabilities in the near future. Our team is working hard to bring some of the most innovative urban mobility driver assist technologies to our cars. Our exit strategy in the next 5-10 years is to build a truly sustainable mobility company and expand globally by public IPOs or strategic partnerships with shared mobility platforms or existing OEMs.
What do you believe is the biggest risk for the company?
We operate in a highly competitive market but one that has limited manufacturers and supplier networks. Traditionally, automotive industry is considered to be slow to react and accept changes and this presents a major challenge for rapidly growing startups like Strom. Forming the right manufacturing partnerships and scaling our team globally will be a challenge in the coming 2-4 years. One of our first seed fund came from Neeraj who has been ex-country head of Honda, Nissan and VW in India and having experienced board of advisors like him provides us the right guidance to achieve our goals.
Did I Invest In Strom Motors?
I’m still in the process of writing a full deal report and decide whether or not I will invest in Strom Motors. I send my investment reports on Saturday to subscribers of the Angel Notes newsletter (you can join through the form below). See you soon!