India’s urban population is rising rapidly with its youth migrating to cities in large numbers in search of jobs and better economic opportunities. This increase in urbanisation stimulates mobility needs, thereby causing the demand for vehicles to rise. This will further lead to an increase in the country’s dependence on importing crude oil, causing the overall carbon footprint to rise. On the contrary, India’s pledge under the Paris Agreement is to reduce the carbon intensity of its economy by 33-35% by 2030, as compared to the 2005 levels.
India is quickly moving in the direction of electrifying mobility with the intent to catalyse demand for electric vehicles (EVs). Additionally, support from the government in terms of easing regulations, reduction in battery cost and availability of charging infrastructure are expected to be instrumental for mass adoption of EVs. A booming electric vehicle market for India preludes an economic growth for the automotive sector as well as generates jobs in the process.
The Indian EV sales stood at 1,26,000 for electric two-wheelers and 3,600 for electric four-wheelers in FY19, as compared to FY18, where 54,800 electric two-wheelers and 1,200 electric four-wheelers were sold, according to the Society of Manufacturers of Electric Vehicles (SMEV). The rapid growth witnessed in this sector is in harmony with the government’s push towards electric mobility in order to control the rising pollution caused by vehicles while it also fulfils its vision of having at least 30% of electric vehicles on Indian roads by 2030.
India’s commitment to adopt EVs was evident in the Union Budget 2020 when Finance minister, Nirmala Sitharaman, announced that basic customs duty on completely built units (CBUs) of electric vehicles will be increased to 40% from the existing 25% from April 2021 and the import of semi-knocked down (SKD) form of electric passenger vehicles has been doubled to 30%.
Startups are playing a pivotal role in the evolving electric mobility space in India. Charging infrastructure and mobility services are the key opportunity areas for startups with the emergence of various new business models. In addition to this, they are also creating new business opportunities for digital technologies like charging location finders and reservation applications, online payments and ride-sharing services.
Ather Energy, a Bengaluru-based EV startup, develops and manufactures its own e-scooters, offers charging infrastructure through its ‘Ather Grid’, provides consumer services that include cloud software upgrades and has also come up with new ownership models such as subscription and leasing, which are proving to be popular ownership models to bring customers on board before they can convincingly adopt the new technology.
Yulu is a technology-driven startup, solving the problem of first and last-mile connectivity. Yulu Miracle is a smart, dockless e-bike which is designed for urban traffic conditions. Yulu has collaborated with Delhi Metro Rail Corporation (DMRC) to provide their services in and around metro stations in Delhi. Mumbai Metro Region Development Authority (MMRDA) has also signed an MoU with Yulu to provide e-bikes to Metro commuters at various metro stations in the city.
Pune-based Tork Motors, that holds more than 40 different IPs with respect to their technology, design and trademarks, will soon be offering new ownership models such as leasing options and is already setting up fast-charging infrastructure in Pune.
DOT, a Gurugram based EV logistics startup, supplies EVs to major e-commerce and food-tech players such as Walmart, Amazon, Grofers, Blue Dart, DHL, Lenskart, Swiggy and McDonald’s.
Investments in Indian EV startups by corporate, venture capital and private equity firms has seen a growth of 170% with a total of $376 mn being invested in 2019, as compared to $147 mn in 2018.
|Company||Investors||Amount ($ Mn)||Date|
|Ola Electric Mobility||SoftBank Corp|
|Ola Electric Mobility||Arun Sarin Family, Ratan Tata, Matrix Partners India, Tiger Global, Others|
|Ather Energy||Hero Motorcorp, Sachin Bansal|
|Yulu Bikes||Bajaj Auto|
Looking to stimulate and strengthen the EV startup ecosystem, incubator and accelerator
Huddle and early-stage venture capital firm GrowX ventures have announced India’s first acceleration programme for EV startups. The selected startups under the program will be offered various benefits such as mentorship from industry experts, seed investment led by GrowX ventures and pilot opportunities from companies like Exide, TATA, and Swiggy, who are partners at the Huddle – GrowX EV accelerator.
LetsVenture, an online funding platform for startups has also launched LetsAccelerate’s EV Innovation Labs to help EV startups in India access resources to become investment and market-ready.
By defining the regulatory framework, exploring incentives and subsidies, laying down a strong foundation of support, innovating on various business models and making the economics of charging infrastructure work, India can create a very conducive and robust environment for the adoption of electric vehicles to achieve its sustainability goals for a greener future.