Indian carmaker Reva to manufacture in NY

Indian auto manufacturer Reva Electric Car has selected Syracuse, N.Y., to build its plug-in electric vehicles, with a manufacturing facility capable of pumping out more than 20,000 cars a year that's expected to be operational by the third quarter of 2010.

A memorandum of understanding was signed with the state of New York today to finalize site selection for the plant in Central New York’s Onondaga County, Robert Simpson told the Cleantech Group today, following a press conference. Simpson is president and CEO of the Metropolitan Development Association of Syracuse and Central New York, which helped coordinate the deal.

Reva has tapped Freeport, N.Y.-based Bannon Automotive to manufacture the cars, which are expected to retail for $15,000 to $25,000. Reva is granting exclusive U.S. development and production rights to Bannon, pending some financing commitments. Bannon is looking to complete its financing by the end of 2009.

The county was the top pick after Bannon toured more than 150 sites in nine or 10 states, Simpson said (see Reva eyes NY for electric vehicle factory).

Recent press reports highlighting the site selection are wrong, Simpon said. There are still several sites under final consideration, including one in Syracuse suburb Clay, and all the sites would include reusing existing warehouse or manufacturing facilities. The ideal site would be about 200,000 square feet, Bannon said.

“We had no shortage of manufacturing facilities they could look at,” said Simpson, adding that there were also state and federal partners eager and willing to create incentives to make the deal possible.

Some of those perks include loans, deferred property taxes, technical assistance in starting up, grant incentives from the New York state assembly, senate and governor’s office, and Empire Zone program, which includes investment tax credits, Simpson said.

Bannon's Senior Vice President Jordan Clay told the Cleantech Group the total New York state package is about $18 million.

Bannon has also applied for $35 million in loans from the U.S. Department of Energy to further ramp its production capacity.

The vehicles are expected to have a couple different battery packages, one with lead acid that could reach top speeds of 50 to 60 mph. The car would cost about $17,000. The second lithium-ion package enables the vehicle to travel 80 to 100 miles on a single charge, with a vehicle cost of $24,000 to $25,000, Levy said.

"Reva is sourcing [batteries] from various companies in the United States," Levy said. "We're in discussion to see who is going to be our vendor of choice, and it may be more than one." 

Levy also said the vehicle has been designed to be battery agnostic, meaning that as battery technology evolves, customers could buy upgrades.

"The REVive technology provides excess capacity so that if the battery drains down to a certain point, you can tap into an excess reserve," Levy said. "That's a feature nobody else has." 

Bannon was started about a year ago for the purpose of setting up the vehicle manufacturing plant in the United States and making affordable electric vehicles. It’s been backed with undisclosed funding solely by its senior partners, Levy said.

Bannon and Reva have initially committed to spending $20 million to $26 million to build out the facility, including other material costs, Simpson said. This is expected to increase to $35 million to $50 million as the company ramps up, Levy added.

The facility could lead to an initial investment of about $40 million in the surrounding economy, which could grow to $50 million to $75 million in the next five years.

“This is a real shot in the arm for the Central Upstate economy,” Simpson said. “We have already had conversations with local companies who are potential suppliers to the business.”

Simpson said the region has been working for the last 15 years at positioning itself within the cleantech and renewable energy sectors, centered on batteries, indoor environmental technology, green building materials, and biofuels. The area also boasts a significant workforce with auto manufacturing experience.

“Our economic development strategy is pretty focused,” he said.

In November, the region will be home to a new $36.5 million facility focused on researching energy and environmental systems and spinning out the technology, Simpson said. And last week, cleantech company Bitzer Scroll, a subsidiary of a German-owned business, opened its $50 million, 350-employee factory in Salina, N.Y., to manufacture air compressors, Simpson said.

The Reva facility is expected to employ about 100 people with the potential for that to increase to up to 250 at maximum capacity in the first three years of operation, Simpson said.

Last month, Reva unveiled two highway-ready electric vehicles at the Frankfurt Motor Show, the world's largest motor show organized by the Association of the German Automotive Industry.

"Over 30 million miles have been traveled with this technology," Levy said. "We think we have a unique vehicle at the right time." 

The Reva NXR, a four-seat, three-door hatchback family car, is scheduled to go into production in 2010, while the REVA NXG, a sporty two-seater designed by Dilip Chhabria of DC Design, is set for 2011 (see Two new electric cars for India this month?).

The vehicles would follow in the footsteps of Reva's original electric car, the REVA, with a cost of Rs 300,000 to Rs 389,000 ($6,100 to $8,000) in India after government subsidies, and an operational cost of Rs 40 ($0.82) for 100 kilometers (see Reva-ing it up in Delhi!).

Reva is a joint venture between Maini Group of India and AEV of California. The company’s backers include the Global Environment Fund and Draper Fisher Jurvetson.

Cleantech developments making news in the past 24 hours

• Metabolix, ADM to open new bioplastics factory
• Rockwool nears construction on Indian insulation factory
• Two Israeli wastewater firms to locate in Michigan

View the last week of cleantech developments here | Subscribe to full feed