Saietta Group PLC (AIM:SED) has inked a new agreement with a commercial partner, described as “one of the largest OEMs in the Indian light-duty mobility market”, which sets up an opportunity to distribute some 60,000 EV drive chain units over a potential 5-year period.
The agreement covers an anticipated third line of electric vehicles with its existing Indian client, and, follows a previously announced client partnership, which was set up to support product development and industrialisation of electric vehicle (EV) drive systems and their associated electronics.
Previously, in March, Saietta told investors that it was confident mass production in India would start in 2023 for, the first two vehicle platforms, and would target at least 80,000 eDrives.
Today’s agreement, for a third product line, is specifically for lower-powered small commercial vehicles and is expected to open the AIM-quoted company to a new and rapidly expanding market, for lightweight electric vehicles (LEVs).
An initial 12,000 unit order is anticipated, after the firm has proven to the client that it can fully meet the client's requirements.
Saietta said it will retain the intellectual property for the RFT (Radial Flux Technology) used in the drive chain units, alongside partner Padmini which will contribute £857,000 towards the product development costs.
Manufacturing is due to be handled in Delhi, it added, and it expects the first formal production purchase order “in due course”.
"This is an exciting time for Saietta,” said Saietta executive chair Tony Gott. “It is the culmination of many years of hard work to develop deep insight into the Indian lightweight mobility sector and to then engineer a range of complete, modular eDrive solutions specifically for it - designed in the UK to 'Make in India' with a largely Indian supply chain.
"This new agreement from our major Indian OEM customer for a third product line is further validation that our product and service offering is highly valued.”
Gott added: “Our core focus is on providing eDrive solutions for lightweight electric vehicles in India and we are aggressively ramping up our industrial activities in market to ensure we have the right people, facilities, equipment, processes and supply chain in place to deliver high quality solutions to our clients.
“We are confident that we will achieve our mission to see lightweight electric vehicles powered by Saietta on the road in India in the first half of 2024."
In Wednesday’s early deals, Saietta shares shot up some 30% to trade at 46.75p which values the company at just under £50 million.