Vrooming for the Future
Source: investindia.gov.in


India is expected to be the world’s third-largest automotive market in terms of volume by 2026. The industry currently manufactures 26 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycles in April-March 2020, of which 4.7 mn are exported. The Automobile sector contributes 49% to India’s manufacturing GDP and 7.1% to India’s GDP.

Source: investindia.gov.in

#Only Aug 18 -March 2019 data is available for 2018-19                                                      Source: SIAM India

Electric Vehicles (EV) and their ecosystem

87% Of Indian Vehicle Owners Ready To Buy Electric Vehicles If That Reduces Pollution

Survey by IndiaSpend

The EV market is expected to grow at a CAGR of 44% between 2020-2027 and is expected to hit 6.34 million-unit annual sales by 2027. The EV industry will create five crore direct and indirect jobs by 2030. The government of India targets 30% electric vehicles by 2030. The electric vehicle market in India is expected to be valued at $2bn by 2023. FDI inflows into automobiles are 5% of the total FDI inflow in 2020.

Key features which will accelerate this shift

  • As prices of EV starts matching Internal Combustion Engines (ICE), and the total cost of ownership matches regular bikes, there should be no reason for vehicle owners not to shift.
  • EVs will bring a massive shift in complementary businesses like Fuel Bunks, Vehicle Service Shops and technology solution providers.
  • Servicing and failure issues should reduce with advance warning systems and modular drive management systems.
  • The Electricity Act 2003 that charging an electric vehicle is classified as a service and that no licence is required for this business activity

The known friction points in the movement from ICE to EV

  1. Cost
  2. Distance covered on a single charge
  3. Re-charge facilities and techniques
  4. High Torque Vehicle technology

Spaces for bets

  1. EV Vehicle manufactures
  2. Battery Manufacturers
  3. Vehicle software developers
  4. Battery Charging services
  5. Bikes on hire for feeder services

Two Wheelers

India leads in the two-wheeler market, not only because of domestic consumption but also because of exports.

Source: motorcyclesdata

The two-wheeler segment is 80% of the passenger vehicle market. Expected to be valued at $200 mn by 2023 and penetration of 34.5% by 2025. Here we are not looking at the conventional bicycle which in many European and East Asian countries are counted as electric bikes. This is primarily because in India motorised transport is also a reflection of arrival in society and bi-cycles even if automated are seen as ones which were used by earlier generations which were both poorer and rural. 

The upside for Two Wheelers

The two-wheeler market should see a speedy uptick in volumes for reasons;

  • Public transport in India being underdeveloped there is a demand for low-cost personal mobility devices and motorbikes are the first entry point in the personal automobile ownership space.
Source: Society of Indian Automobile Manufacturers
  • The cost of running an electric vehicle will be much lower than an ICE bike
  • Electric bikes can easily manage mobility within cities on a single charge
  • Post-COVID there is bound to be an uptake both because of safety and pent-up demand

Startups to watch out for

1.    Ather S340 – https://www.atherenergy.com

Engineered ground up, this vehicle has been designed in India and gets manufactured here. Very steeply priced compared to a regular scooty is a big penetration barrier.

2.    Charjet Electric Vehicle Solutions – https://charjet.in/charjet

Operates a network of Electric Vehicle Charging Stations. Are they future petrol stations of India? There are many entrants in this space, including Ola who will be a big player in this space. The limitation to these charging stations is the lowest time required to recharge a motorbike or a vehicle will be around 30 minutes. Compared to the time required to refuel an old ICE vehicle, this will be a hurdle in its penetration.

3.    Sunmobility  – https://www.sunmobility.co.in

Offers battery swapping stations, reducing wait time for charging. This is an exciting business model, as it will have a high impact on vehicles plying for long hours, like vehicles used in public and goods transport. This model reduces the wait time at the charging station as well as the capacity to go on long runs without having to come back to a charging point.

4.    Ebikego – https://ebikego.in

E-bikes on rent. A useful hire service for people who don’t want to invest in buying. Similar to self-driven rented cars, this business model has promise in many service instances, like tourist spots and multiple visits in high-density cities. This model can scale up if it can be used for short transit like metro stations to business/university hubs.


The automotive sector has been the prime mover of industrialisation for a century now and will continue to do so for the foreseeable future. This industry through consolidation has come to be dominated by a limited set of companies which are large conglomerates. EVs are shaking up the industry with a completely new set of players like Tesla, Apple and many smaller new entrants trying to create new models. While EV penetration reaching at least 15% of the automobile market is still a couple of years away, this will be the right time for investors to enter this space. I believe that in the Indian market EV two-wheelers should capture at least 30% of the urban market by 2023 with multiple brands and Chinese assembled models awaiting COVID conditions to abate before unleashing their models.

My bet

While any EV two-wheeler start-up should be able to gain quick traction as long as they are able to get their pricing closer to ICE motorbikes my pick is an adjacent service providing company-Sun Mobility. It will be the ubiquitous petrol stations of the future, with much lesser space and manpower requirements. While it has much lesser Capex requirements as compared to the charging station model, the bigger feature is that an EV owner can just swap the battery and move on, a very similar ion practice to the current fuelling stations model used for ICE vehicles. Its founder Chetan Maini was the founder of Reva, the earliest electric car in India. In September 2020 Bosch, the German automotive component manufacturer picked up a 26% stake in this company. On 25th March 2021, they launched swap points in Delhi, which is the largest automobile market of India.

Appendix: Investments in Electric Two-Wheeler Space

Date Company name Company type Deal type Acquirer/ Investor(s) Deal value (in $ Mn) 
Jan-18RentOnGoOnline vehicle rental marketplaceEquityTVS Motor0.8
Jan-19RapidoBike taxi aggregatorEquityIntegrated Capital, Skycatchr, AdvantEdge and Astrac Ventures10
Jan-19VogoBike rentalEquityMatrix Partners India, Stellaris Venture Partners, Kalaari Capital, Pawan Munjal’s family office8.8
Jan-21Simple EnergyElectric scooter OEMEquityVel Kanniappan and four other investorsUndisclosed
Jan-21TresmotoElectric scooter OEMEquityAngel Investor and professional CEO Raaj KumarUndisclosed
Feb-21eBikeGoEV-based logistics startupEquityBollywood singer Sukhbir Singh, Quess Corp Ltd CEO Vijay Sivaram, Asian Institute of Technology’s Brahmanand Mohanty, and Mungo Befestigungstechnik AG chairman Alparslan Kutukcuoglu1.5
Feb-21VogoBike rentalEquityLightrock, Kalaari, Matrix Partners and Stellaris Venture Partners11.5
Mar-19BounceBike & scooter rentalDebtSachin Bansal3
Mar-19VogoBike rentalDebtSachin Bansal3
Mar-20BounceBike & scooter rentalEquityInnoVen Capital7
Apr-19BounceBike & scooter rentalDebtInnoVen Capital3
Apr-20BLiveEV tourism startupEquityMumbai Angels NetworkUndisclosed
May-19Ather EnergyManufacturerEquitySachin Bansal32
May-19Ather EnergyManufacturerDebtInnoVen Capital8
May-20EtergoOEMM&AOla ElectricUndisclosed
Jun-19BounceBike & scooter rentalEquityB Capital, Falcon Edge, Accel Growth Fund, Maverick, Qualcomm72
Jun-19Tork MotorsManufacturerEquityBharat Forge4.3
Jun-19VogoBike rentalDebtAlteria Capital3.6
Jun-19VogoBike rentalEquityAnanth Narayanan, K Ganesh, Srini Anumolu, Manish Vij1.1
Jun-20Yulu Bikese-bike rental startupEquityRocketship.vc3.96
Jul-18Ather EnergyManufacturerEquityHero MotoCorp19
Jul-19Ampere VehiclesManufacturerEquityGreaves Cotton5.6
Jul-19Pure EVManufacturerEquityV.C. Nannapaneni, Chairman and Managing Director, Natco Pharma35
Date Company name Company type Deal type Acquirer/ Investor(s) Deal value (in $ Mn) 
Jul-20Earth Energy EVOEMEquityLR Joshi, MD, Pranada Bio-Pharma and othersUndisclosed
Jul-20Ather EnergyOEMEquityHero MotoCorp Ltd.11
Aug-18BounceBike & scooter rentalEquitySequoia Capital India and Accel Partners12.2
Aug-18Ultraviolette AutomotiveManufacturerEquityTVS Motors0.9
Aug-19RapidoBike taxi aggregatorEquityWestbridge Capital, BAce Fund, Astrend India Investment and Nexus Venture Partners54.9
Sep-18BounceBike & scooter rentalDebtInnoVen Capital3
Sep-20Ultraviolette AutomotiveOEMEquityTVS Motor4
Oct-1822 MotorsManufacturerEquityKymco65
Oct-18Ampere VehiclesManufacturerEquityGreaves Cotton10.5
Oct-19Tork MotorsManufacturerEquityRatan Tata 
Oct-20Ultraviolette AutomotiveOEMEquityGoFrugal TechnologiesUndisclosed
Nov-19Ampere VehiclesManufacturerEquityGreaves Cotton8.4
Nov-19VogoBike rentalEquityMatrix Partners, Stellaris Venture Partners, Kalaari Capital.4
Nov-19YuluBicycle & e-scooter rentalEquityBajaj Auto8
Nov-19ZyppE-scooter sharingEquityIndian Angel Network2.1
Nov-20Ather EnergyOEMEquitySachin Bansal, Hero MotoCorp35
Dec-17Ultraviolette AutomotiveManufacturerEquityTVS Motors0.8
Dec-18Hero ElectricManufacturerEquityAlpha Capital Advisors22
Dec-18VogoBike rentalEquityOla100
Dec-18VogoBike rentalDebtAlteria Capital1.1
2014Ather EnergyManufacturerEquitySachin Bansal, Binny Bansal, Raju Venkataraman1
2015Ather EnergyManufacturerEquityTiger Global12
2016Ather EnergyManufacturerEquityHero MotoCorp31

Source: JMK Research

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The author has over two decades of experience navigating, crossing channels, sinking, and floating across different retail businesses and various categories. He believes that the final game of any business is in getting its consumers to enjoy the whole process of pre to post-purchase moments, and a smart investor chooses businesses that consistently delivers these moments.



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