• Kovllp Consulting

Business Opportunities for Indian Start-up and SMEs from the growing Electric Vehicles.

Updated: Oct 16

In India, the transport sector consumes approx. 94 million tonnes of oil equivalent (MTOE) energy which is estimated to be about 18% of total energy consumption, largely met through mostly imported crude oil. Close to 123 million tonnes of CO2 is being emitted from the automotive sector. In order to ensure Energy security, The Government is very keen to reduce emission intensity in the country by 33- 35% by looking into E mobility as the answer for the problem. The EVs in India is made of light weight metal operating on electric motor instead of the Internal Combustion Engine (ICE) which burns petrol or diesel to generate power and requires regular maintenance for its smooth running. Electric vehicles on the other hand are expected to lower the fuel consumption and maintenance cost by at least 70% which is very reassuring from the customer’s point of view.


There are three types of Electric vehicles currently being sold in the Indian market,


1. Solar powered vehicles

2. Vehicles with on-board battery packs

3. Hybrid vehicles - powered by mix of internal combustion and batteries


An Electric vehicle is made of following parts and the numbers shared in brackets indicates an estimated cost contribution in making 1 vehicle.


1. Battery (Cathode, Current Collectors, Separators, Electrolytes, Anode etc.) - 35%

2. Drivetrain ( Electric Motor, Controller etc. ) - 25%

3. Chasing and Body parts - 20%

4. Systems, Equipment's and Other components - 20%


Globally, in 2019, approx. 2.2 million units of E-vehicles were sold, making the numbers to approx. 70 lakhs vehicles on the road. In India too, the electric vehicle industry is looking forward to shape up on fast track mode. Government has come up with various policies and incentives to boost the industry. The Government is aggressively pushing for Electric Vehicle based mobility in the country. Delhi government has started providing incentives worth of 1.5 lakhs to ensure clean mobility solutions along with waiver on registration fee and road tax. A scheme announced recently to fund up to 60% of R&D costs for the development of indigenous low-cost electric technology.


Global automobile players and stakeholders are investing heavily in R&D of electric vehicle technologies like high performance Li-ion batteries. Indian market has shown a true interest towards electric 2 wheelers and 3 wheelers while 4 wheelers is yet to make a strong hold over the market. Various start-ups and SMEs have taken keen interest to leverage the growing opportunity of EV industry. As per Avendus Capital, close to USD 700 million of capital has been raised in this space in India from various stakeholders.


Indian SME/Start-ups will have the following business opportunities to play a strong role in the growing EV market of India


1. EV Battery Assembling/Manufacturing

a. Cell Manufacturing

b. Pack Manufacturing

2. Various EV Components

3. Battery Charger Operator's

4. Charger Manufacturing

5. Charging as a service

6. Battery on rent

7. Wholesale and retail trade of the end product

8. Wholesale and retail trade of batteries and components

9. E-Vehicle on rent

10. Post sale services

11. Battery recycling


India currently has seen a large number of li-ion batteries being produced in house which till a few months back was imported from China. This push from the Indian government has resulted in many large to medium size companies entering into the manufacturing business of batteries. Large companies like Tata, Adani, Aditya Birla have expressed their interest in venturing into various EV components and its manufacturing. Apart from the production of batteries, charging network setup, rental business of EVs and battery recycling are among the most sought after areas which should be focused by SMEs to expect profitable revenue in the near future.


A study done by Avendus Capital, estimates by 2025, E-Vehicle market in India will be of INR 475 BILLION, WILL FOLLOWING BREAK-UPS


  • Two Wheeler - INR 120 Billion

  • Three Wheeler -INR 180 Billion

  • Four Wheeler - INR 100 Billion

  • Light Carrier Vehicles - INR 15 Billion

  • Bus - INR 60 Billion


Above values suggest the ever increasing demand of EVs and underlines the promising future for those interested in taking up with the wholesale and retail of the end products. With a small capital investment in terms of infrastructure and other related amenities, SMEs can foresee a profitable business opportunity with huge potential.


Vivid opportunities that are available for SMEs to venture into are plenty in the sector. Companies like BluSmart have already taken the initiative in the e-cab rental business and is showing profitable returns. Subsidies by government especially in the R&D of battery production and extensive collaboration with private players in the field reassure steady revenue generation for those interested in setting up such enterprises.


Opportunities in terms of providing spare parts or after sales service should be taken up by SMEs to gain an early mover advantage. In terms of ROI, ventures related to EVs mentioned above are sure to gain a steady and profitable revenue in the near future as the sales of EVs are expected to rise exponentially over the next few years.

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