Summary Points:
- EV startups in India rose fast with funding and government subsidies but prioritized quantity over quality.
- Legacy automakers like Bajaj, TVS, and Mahindra now dominate due to strong manufacturing and supply chains.
- Product failures, weak after-sales, and safety issues plagued many startups.
- Despite setbacks, new opportunities exist in EV financing, battery tech, and insurance.
- Startups must now focus on innovation, reliability, and solving real customer pain points to survive.
India’s EV journey began with excitement. In 2015, the government launched the FAME scheme to boost electric vehicle adoption. Startups jumped in, and the funding followed.
By 2019, over 450 EV startups had emerged. By 2022, this number had crossed 560.
Names like Ather Energy, Ola Electric, Euler Motors, and Okinawa Autotech were seen as game-changers. But the reality? Most of them struggled to scale sustainably.
Why EV Startups Are Struggling Now
Despite early success and huge funding, most Indian EV startups hit major roadblocks.
1. Focus on Quantity Over Quality
To meet subsidy demands and investor expectations, many startups cut corners—especially on product quality.
Case in Point: Between 2021–22, multiple EV fires and product breakdowns plagued the market. Faulty suspensions and low-grade batteries raised serious safety concerns.
2. Poor After-Sales Support
Many startups underestimated the importance of service. Unlike legacy brands with service centers across cities, startups often left buyers frustrated post-purchase.
3. Dependence on Chinese Components
To reduce costs, some brands imported entire vehicles or key parts from China. This backfired when the government cracked down on such practices—leaving several players exposed and unable to adapt.
How Legacy Players Took the Lead
While startups stumbled, Bajaj Auto, TVS, Mahindra, and Piaggio entered the EV game with an edge:
- Strong manufacturing processes
- Deep distribution networks
- Reliable product quality
Example: TVS iQube and Bajaj Chetak gained steady traction due to customer trust and consistent performance.
Startups like Ola Electric and Ather Energy, once seen as pioneers, now face declining monthly sales. Ola, which once shipped 30,000+ scooters monthly, is now at under 20,000 units.
ALSO READ: Startup Pitch Secrets: Crack the Code to Raise Your First Round
Are Startups Finished? Not Quite.
While traditional EV manufacturing is capital-heavy and difficult to crack now, there are new white spaces where startups can still lead:
1. Battery Technology
India needs indigenous, efficient, and safe battery systems. Startups working on solid-state batteries, thermal safety, or battery-as-a-service models have room to grow.
2. EV Financing
EVs still have a high upfront cost. Fintech + EV startups that can offer customized loan products, credit scoring, or subscription models are in demand.
3. Powertrain Innovation
Advanced EV motors, regenerative braking systems, and low-maintenance drivetrains are areas open for disruption.
4. EV-specific Insurance
This is a niche yet rapidly growing space. Insurtech startups can build solutions tailored to EVs—covering battery degradation, charging risks, and more.
Lessons From the Fall
The EV startup story in India is a classic case of rapid growth without groundwork.
As Deb Mukherji, a veteran from the auto industry, puts it:
“Automotive is a serious business. You can sell a bad product for a while, but only quality sustains.”
EV startups in India have learned tough lessons. Those who focused on scale over substance are now fading.
But it’s not the end of the road. It’s a new phase—one that demands deeper tech, smarter execution, and customer-first thinking.
The next winners won’t be the fastest to market—but the ones who build to last.
