ElectronEV is looking to invest about $12 Mn to boost its operations in India
ElectronEV said that its technology has grabbed the eyeballs of many in the food and milk industry, heavy-duty segment, and ports
Unlike most OEMs, the startup offers tailor-made commercial EVs to its clients
In India’s booming electric vehicle (EV) ecosystem, there is a critical vehicle category missing out from the mainstream focus — medium- and heavy-duty commercial vehicles, especially trucks. While electric three-wheelers have started gaining traction in the commercial vehicle space, medium and heavy commercial vehicles carrying tonnes of goods on Indian roads every day continue to guzzle diesel in large amounts, contributing to the rise of nitrogen oxides in the environment.
Fortunately, the US and Hyderabad-based EV startup ElectronEV has emerged as one of the few players to resolve this issue. While the EV startup has been working on product development since 2019 from its Hyderabad office, it formally forayed into the Indian market with its demo zero emissions medium and heavy-duty commercial vehicles in August this year.
Founded by Vinay Jayachand and Rakesh Koneru, the startup claims to be working on advanced powertrain systems to reduce the environmental impact of trucks or other heavy-duty commercial vehicles, thereby revolutionising the transportation ecosystem in the country. Currently, the startup deals with commercial vehicles that weigh between 5 and 40 tonnes.
India’s Need For Green Heavy-Duty Commercial Vehicles
As per a 2022 Niti Aayog report on the need for the deployment of zero emission trucks (ZETs), or other heavy-duty commercial vehicles in India, the emission of nitrous oxides (NOx) and particulate matter (PM) is expected to increase through 2050 under a business-as-usual scenario. The Indian government’s push towards reducing pollutants with stricter emission standards such as Bharat Stage VI may also fail to keep this rise in check.
However, the report states that the adoption of ZETs would play a vital role in reducing cumulative trucking pollution by about 40% by 2050. It goes without saying that the answer to this lies either in lithium-ion battery commercial vehicles or fuel cell electric vehicles running on green hydrogen.
Today, amid aggressive competition between many two-wheeler EV players in India and more joining the race, there are hardly any EV players taking charge of making a difference in the medium-and heavy-duty commercial vehicle segment. Hence, there is a massive market opportunity for players like ElectronEV.
The scope further gains strength with the central and state governments’ push for more electrification of vehicles. However, the major challenge is that India’s national- and state-level EV policies introduced so far, including FAME, primarily focus on two-wheelers, three-wheelers, four-wheelers, and buses.
ElectronEV’s Emerges As A Differentiator
The EV startup has been on a mission to build software and hardware stacks for its electric trucks. The company is soon set to become an original equipment manufacturer (OEM) in the medium- and heavy-duty commercial EV segment.
According to the startup’s founder Koneru, who has over 10 years of experience in the medium- and heavy-duty electric vehicle industry, ElectronEV has spent the majority of its time, efforts, and money on the technology aspect of building the software and hardware stack for EV trucks.
He said, unlike most OEMs, ElectronEV first understands users and their respective operations, and then defines parameters for a vehicle – from battery pack size to the types of motors and the required charging speeds – using the company’s software-driven technology stack.
“We tailor-make it because when it comes to commercial vehicles, one system or one solution will not fit all applications,” Koneru explained, adding that commercial vehicles space is heavily user-driven and requires unique methods to solve unique problems.
The founder said that their technology has grabbed the eyeballs of many in the food and milk industry, heavy-duty segment, and ports. While the startup did not reveal the names, it claims to have already received orders for the first 102 vehicles and is soon expected to close bookings for another 20 to 25 vehicles.
India Fits Perfectly In ElectronEV’s Grand Scheme Of Things
Despite sourcing its technology largely from the US, India has become a better match for ElectronEV to manufacture, launch, sell, and distribute its vehicles.
“Between the US and India, the reason why we picked India was we felt that technology is a little bit more in the early stages and the economies of scale are slightly different,” said Koneru.
In its next step, ElectronEV is looking to invest about $12 Mn to boost its operations in India. Of this, $8 Mn would be dedicated to deploying vehicles on the road and $4 Mn would be used for research and development.
According to Koneru, the startup has so far built its technology without much help or external funding. In fact, ElectronEV has thrived on internal seed funding of just $2.5 Mn.
However, to boost its India operations, the startup is now looking to raise $12 Mn in a Series A round by the end of this year through different investment channels, from both Indian and foreign investors.
Besides, we will be looking at raising around $700 Mn across various funding rounds over the next 4-5 years,” said Koneru
Challenges Ahead For ElectronEV
As of now, the two major areas of focus for Koneru and Jayachand are scaling India operations and deploying the ordered vehicles on the road, along with working on building ElectronEV as an OEM.
However, one of the major pain points that Koneru mentioned was the lack of an efficient supply chain ecosystem to facilitate the electrification of vehicles in India. In fact, EV players in India are heavily dependent on imported battery cells and EV batteries, largely from China.
“While certain supply chains are being built around the smaller classes of vehicles such as two-wheelers and three-wheelers, with new players emerging in the battery cells or BMS manufacturing space, it’s completely missing for the commercial vehicle space, especially for the heavy-duty cycle requirement,” Koneru said.
Speaking about the bigger class of vehicle, he pointed out that energy density matters and that can only be achieved through a different format of cells like the pouch or prismatic cells.
When it comes to heavy-duty commercial EVs, prismatic cells are the most efficient. However, there is no company in India that is currently making prismatic cells, he said, acknowledging the gap in India’s supply chain ecosystem.
“Therefore, we are trying to build that ecosystem by designing our own product line and working with players outside India,” Koneru said.
With the deployment of its vehicles expected to start soon, ElectronEV looks at becoming a revenue-generating company in the next six months.