India is now one of the countries to achieve vivid adoption of electric vehicles. The revolution kickstarted in 2020 and has fared out well. The rising tide of electric vehicles across the globe is contributing to achieving sustainable transportation. Specifically in India, leading auto manufacturers have joined the race to make India a fully EV-powered nation. 

 

Several factors have contributed to the rapid growth and adaption of electric vehicles. This includes new technologies, investor interests, government policies, the surge in bookings and more. Above all, there has been a significant boom in the number of startups entering the EV segment. Research shows that nearly 43 new entrants have marked their spots, raising funding of around $673 million this year. 

 

The valuation of India’s EV market came to $7 billion in 2021 and is expected to touch $30 billion by 2027. In terms of investment, the number is projected to reach $20 billion by 2030. Looking at the graph throughout the years, India’s electric vehicle-focused startups can witness a rising investment trend. 

The regular fundraisers in India’s EV segment include names like Ather Energy, Ola Electric, Hero Electric, Euler Motors, Ather Energy and Ultraviolette. In addition, Bounce Electric has also entered the electric vehicle space, acquiring 22 motors in an $8-10 million worth deal. 

 

Glancing at the top 10 VC-funded startups from the last two years, Ola Electric makes it to the top of the list with a valuation of $5 billion. Next on the list is its close competitor, Ather Energy, valued at less than $1 billion.

Out of 43 deals, six have reached the growth stage. Whereas the rest 37 are in the early or seeding stage. 

The former CEO of Niti Ayog, Amitabh Kant, recently commented that EV starts founded by young entrepreneurs will disrupt the country’s automotive industry ecosystem. While renowned corporates bring their expertise and leadership, EV startups do not stand far behind. They compete for the neck to neck against industry leaders, especially in the two-wheeler segment. 

 

Above all the other factors, government subsidies have worked out considerably well in favour of these EV startups. For example, Okinawa, the company that entered this market in 2015, was the first to witness customers benefiting from the Government’s FAME II subsidy.

 

Coming to the sales figures, companies like Hero Electric, Okinawa, Ampere, TVS, Ather and Ola Electric make it to the top of the charts. Of course, temporary setbacks have followed, but that does not hinder Indian EV startups from putting their best foot forward. 

 

In addition, some EV companies like Ather, BGauss, Bounce Infinity, Ampere, Yug Electric and Okaya have also been listed on e-commerce websites, including Amazon and Flipkart. Attractive offers on these platforms greatly speak to consumers. 

From the start of the EV revolution in India, the Central Government has been offering multiple subsidies for rapid adoption of the same. As a result, the FAME II policy has been in the limelight for its manifold benefits and is valid till March 2024. 

 

Secondly, there is also a Production Linked Incentive Scheme defined for the NPACC to boost the manufacturing capacity for indigenous batteries, aiming to create a greater domestic capability. 

 

The agenda for EV policies also includes a subsidy for companies aiming to set up an electric vehicle charging infrastructure across the country. Alok Kumar, the Union Power secretary, recently shared that a fund of Rs. 4-5 lakhs is to be allocated to support a 200kw EV charging facility setup. However, looking at the stats, there are only 1742 EV charging stations.

 

Following their footsteps, state governments are also extending policies to promote the rapid adaption of EVs. For example, the Delhi government recently announced its target to achieve 80% electrification of the DTC fleet in the next three years. In addition, it also aims to become the first Indian city to have 8000 electric buses.

 

Similarly, Haryana, Rajasthan and Tripura have also approved specific EV policies, and the Uttar Pradesh Government has issued a draft. According to this policy, a 15% rebate will be given to customers purchasing two of our four-wheeler EVs. 

 

On the other hand, some states like Maharashtra and Goa have also been scraping these policies. Reports suggest that the country is projected to reach sales of 50 million EVs by 2030.

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Now coming to the achievements and goals, let us quickly glance through the landmarks so far and see what’s in store.

Nirmala Sitharaman, the country’s Financial Minister, announced that the government plans to introduce a battery-swapping policy to boost EV adoption and sales.

 

A subsidy amount of 4-5 lakhs is to be allocated to set up 200 kW charging infrastructure for EVs. Bringing in multiple tenders for 50,000 electric buses in the next year is in the plans for the government. In addition, the prime focus is to be placed on reducing the tax rates on lithium-ion batteries.

 

Foxconn, a Taiwanese contract manufacturer, might associate with the Government to introduce its battery-swapping infrastructure.

 

The country’s government will get together with World Bank to introduce a risk-sharing mechanism, which will compensate banks for issuing Electric vehicle loans. The EV charging stations are going up to 100,000 units from 1,742 units.

Several EV manufacturers and industry experts pointed out the need and scope for battery leasing. It is seen as a more emerging and promising space than battery swapping.

Moreover, introducing a solar-powered model for EV charging would do wonders and bring many benefits to the segment. 

The journey of EVs from being a novelty to a mainstream transport option in the last few years has been awe-inspiring. Several key factors have played their role in promoting the same. However, going ahead, startups in the segment will have to pay more emphasis on costs allocated to safety and testing. 

 

Similarly, the availability of EV charging stations will be a key point of focus for manufacturers, providers and the government alike.