Electrifying Indian Mobility: VC, PEs pump $666 mn in EVs in 2022
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Venture capital and private equity companies have invested $666 million across 24 deals in the Indian electric mobility industry this year so far, a report said. 

A joint report titled ‘Electrifying Indian Mobility’ by IVCA-EY-Induslaw said that the Indian electric vehicle (EV) industry saw an 8x year-on-year growth in VC/PE investments, to $1.7 billion in 2021, from $181 million in 2020. 

According to the report, Fame-II approvals by the government will enable the space towards strong economic growth. 

The report highlights that in the last two years, there have been investments to the tune of $550 million, a jump from the funding received in 2019 ($390 million) in EV manufacturers like Ola Electric, Euler, Ather Energy for the development of newer and safer electric vehicles.  

Highlighting the fact that technology for electric mobility is still at a nascent stage in India needing development, the joint report also said that this industry is likely to create more than 10 million direct and 50 million indirect jobs by 2030. 

“With the Indian startup ecosystem focused on technological adaptation and environment, social aspects have also topped their themes for innovation. This is likely to give further boost and momentum to the growth in ESG and climate specific funds. Fast adoption of EV across all the segments is a path to the green frontier,” said Rajat Tandon, president, IVCA. 

Last year, EV registrations amounted to 330,000 units, a jump of nearly 3x from 2020. 

The report attributed the jump in sales to the need for personal mobility, increased awareness of the environment and rise in prices of fuel. The second phase of Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME II) incentives have also helped in the increased adoption of e2W. 

Electric vehicle sales in the first quarter of 2022 has been almost 110,000 units.  

As of CY21, electric vehicles accounted for 1.1% of total vehicle sales and is expected to account for 39% of total automotive sales by CY27, growing at a 68% CAGR over the next 5 years, the report said.  

“Technology will be a key enabler for a successful transition and given that it is evolving faster than ever. The players need to make multiple bets to survive and grow during this transition. Hence, capital becomes a strategic lever as we embark on this journey to electrify mobility,” said Srihari Mulgund, new age mobility partner, EY-Parthenon.  

Buoyed by the industry’s prospects and the mandate to invest in clean technologies, private equity companies and venture capital funds are investing significant amounts in the Indian electric mobility space.  

Last week, Ola Electric, the electric mobility arm of ANI Technologies Pvt. Ltd, said it will invest $500 million to build a battery research and development (R&D) centre in Bengaluru. The company plans to kickstart operations at the unit by next month and said it will hire more than 500 engineers and PhD holders.   

Last month, Mint reported that private equity majors TPG Capital and KKR & Co. are in talks with TVS Motor Co. Ltd to invest at least $300 million to fund its electric vehicle (EV) business expansion plan.   

Meanwhile, VCCircle had also reported last month that Bengaluru-based electric 2-wheeler maker Ather Energy has initiated discussions with investment banks, exploring the possibilities of going public in the near future.  

India’s EV space has been attracting global firm’s interests for quite some time.    

Recently, Dubai-based META4 group said it will invest Rs 250 crore to set up an electric vehicle plant in Telangana, marking its foray into India’s smart green mobility space.  

In May, Global tech firm ABB Group’s electric mobility arm acquired a controlling stake in Bengaluru-based electric vehicular infra company, Numocity Technologies Pvt. Ltd for an undisclosed amount. 

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