According to a recent analysis by market intelligence platform Tracxn, EV start-ups in India raised $1.66 billion in total in 2022, an increase of 117% from 2021. In comparison to just two investment rounds totaling $100 million or more in 2021, the industry saw four rounds in 2022. Additionally, late-stage funding in the sector increased by 124% to $1.02 billion in 2022. Additionally, early-stage funding saw a sharp increase of 160% from $202 million in 2021 to $526 million in 2022. According to the research, the average early-stage investment ticket size increased significantly by 112% this year.
After the US, China, and Sweden, India is fourth in financing for electric vehicle development. According to the study, the top seed-stage investors in this sector in India are Blume Ventures, Micelio, and GrayCell Ventures. At the same time, Tiger Global Management, Sequoia Capital, and Qualcomm Ventures are the largest early-stage investors. The leading late-stage investors are Tekne Capital Management, GIC, and The Rise Fund.
According to Neha Singh, co-founder of Tracxn, “In the latest budget government has introduced more such policies that will surely help the sector like the customs duty on capital goods and machinery for manufacturing EV batteries has been exempted and the duty on lithium batteries has been decreased from 21 per cent to 13 per cent as part of the Union budget for 2023- 2024, which will eventually result in lower pricing and more investment in the industry,”
Next to the US and China, India has the third-highest number of enterprises in the EV industry. In 2 2022, India passed a significant milestone by selling 1 million electric vehicles, with electric 2-wheelers accounting for most of those sales. This year, EV adoption has surged due to favorable government regulations, more options, and expanding EV infrastructure.
“The subsidies for EV batteries have also been extended by another year. The funding for the FAME II programme has also been increased. Although there is still a long way to go until EVs are widely used in India, we believe the government’s plans are wise steps that will support the industry’s rapid future growth,” Singh adds.
According to the report, the-performing business models in this sector are electric car manufacturers, electric scooter manufacturers, and station-based electric bike rentals. Bengaluru has received the most investment ($2 billion) among the cities, followed by Mumbai ($525 million) and Gurgaon ($274 million) in the EV sector.
According to Tracxn’s analysis, the Indian EV market ranks third in terms of the number of firms, behind only the US and China, and fourth in terms of finance, behind only the US, China, and Sweden.
