The electric two-wheeler and three-wheeler segments have the highest growth potential in the overall India electric vehicle (EV) space, Jeet Chandan, co-founder of investment platform BizDateUp told bno Intellinews in an interview.

“In our view, India’s EV market is experiencing significant growth across various segments, but the electric two-wheeler and e-three-wheeler segments stand out as having the highest growth potential in the coming years,” Chandan said.

The electric two-wheeler segment, in particular, is gaining considerable traction due to its affordability, energy efficiency and the increasing need for sustainable urban mobility. In October 2024, the segment experienced its second-best monthly retail sales, reflecting the growing consumer preference for eco-friendly alternatives to traditional two-wheelers.

“This trend is expected to continue as more consumers opt for electric vehicles, driven by incentives, lower operating costs, and increasing awareness of environmental concerns,” Chandan added.

Equally impressive is the electric-three-wheeler segment. Citing a recent report, Chandan said that the segment set a new sales record with 65,728 units sold in October 2024, marking a 15% increase over the previous year’s sales.

“This remarkable growth highlights the rising demand for electric three-wheelers, particularly for last-mile connectivity in urban and semi-urban areas. As logistics and delivery services increasingly adopt electric fleets to reduce carbon emissions and operational costs, this segment is poised for rapid expansion,” he said.

While electric passenger vehicles and trucks also show promise, the combination of lower price points and the growing demand for last-mile solutions makes the two-wheeler and three-wheeler segments particularly appealing in the near future. “At BizDateUp, we are constantly tracking industry growth and opportunities and are actively investing in companies that are shaping the future of sustainable mobility in India,” Chandan stated.

BizDateUp’s investment in India’s EV space

BizDateUp has invested approximately $5mn in the EV sector to date. This reflects its belief in the potential of electric mobility to transform transportation and create a more sustainable future.

One of BizDateUp’s standout investments is InfinityX Innovations, which has developed an innovative 30 second modular cell-swapping system called Magic. This technology reduces the high costs and long charging times associated with EVs, making electric mobility more accessible and practical.

It also backs MOOEV Technologies, focusing on heavy-duty electric trucks and industrial applications such as the cement sector. This investment aligns with BizDateUp’s vision of promoting industrial sustainability through clean energy solutions.

In the logistics space, ZEVO is building an EV-based supply chain network that includes electric vehicles and fulfillment centres, enhancing last-mile connectivity and efficiency.

For urban commuters, BattRE Electric Mobility offers affordable electric two-wheelers that reduce congestion and pollution in cities. Additionally, Revamp Moto develops modular electric two-wheelers designed for micro-entrepreneurs, enabling customisations for business-specific needs like deliveries or vending.

Finally, EV91 focuses on affordable two-wheelers to improve last-mile connectivity in urban and semi-urban areas.

“For BizDateUp, the EV sector is not just an investment opportunity, it is a commitment to fostering sustainable transformation,” Chandan stated. “As the world shifts toward cleaner energy solutions, India is at a crucial point where the demand for eco-friendly and cost-efficient transportation is rapidly growing. The transition from internal combustion engine (ICE) vehicles to electric alternatives, particularly in two- and three-wheeler segments, offers significant economic and environmental benefits, making it a compelling space for strategic investments.”

Growth drivers for the EV sector in India

BizDateUp believes that the EV sector in India is positioned for substantial growth, driven by a combination of favourable government policies, increasing environmental concerns and technological advancements.

One of the most significant growth drivers is government support. Initiatives like the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and PM E-Drive scheme are initiatives, which offer subsidies on EVs and charging infrastructure, are accelerating adoption and lowering the financial barriers to entry for both consumers and businesses.

Environmental awareness is another crucial driver. As the global climate crisis intensifies, there is growing awareness of the need to reduce carbon emissions. This has led to an increasing shift towards sustainable solutions, particularly in the transportation sector. As more people recognise the long-term environmental and economic benefits of electric vehicles, demand for clean and green mobility options is rising.

The ongoing technological advancements in EVs and related infrastructure are also fuelling growth. BizDateUp believes that innovations like InfinityX’s ultra-fast charging technology, which allows vehicles to charge in just 30 seconds, address some of the key pain points for EV adoption, such as long charging times and infrastructure limitations.

Lastly, the growth of charging infrastructure is a vital enabler. While there’s still much work to be done, the expansion of charging stations, particularly with government backing under the PM E-Drive scheme, is improving the convenience and viability of owning an EV, especially in densely populated areas.

“With these factors in place, I believe India’s EV sector is well-positioned for significant growth. At BizDateUp, we are excited to be part of this transformation, supporting startups and innovations that address these challenges and push the sector toward a cleaner, more sustainable future,” Chandan said.

Challenges facing the EV industry

India is on the brink of a major transformation in transportation with the EV revolution. However, several challenges need to be overcome to fully realise the potential of this shift. Chandan argues that the most pressing issue is the high upfront cost of EVs. Despite a steady decline in battery prices, the initial cost of EVs remains a barrier for many consumers, particularly those in middle-income brackets.

Another significant challenge is the limited charging infrastructure, which has not kept pace with the rapid growth in EV adoption. This disparity has led to range anxiety, particularly in semi-urban and rural areas, where the availability of charging stations is still insufficient. According to BizDateUP, recent data from the heavy industries ministry highlights that while more than half of all three-wheelers sold since 2018 are EVs, only 5.28% of two-wheelers and 1.99% of four-wheelers are electric. This slow adoption is partly due to the lack of sufficient charging facilities.

To support the doubling of growth in the EV sector, industry estimates suggest an investment of $20-30bn is needed to develop the charging infrastructure. However, initiatives like the PM E-Drive scheme, which offers incentives that exceed those in the FAME-II scheme, are steps in the right direction, Chandan said. The scheme’s focus on state-wide demand allocation and vehicle density considerations is expected to catalyse the development of charging networks across urban and rural areas, boosting EV adoption further.

“India is on a trajectory with a 25-30% annual growth rate in the EV charging infrastructure space, but there is still a long way to go to match the accelerating demand for electric vehicles,” Chandan said.

Additionally, the EV sector faces supply chain vulnerabilities, particularly the reliance on imported components like lithium-ion batteries. These dependencies expose the industry to global price fluctuations and disruptions, highlighting the need for local manufacturing and the development of robust domestic supply chains.

“At BizDateUp, we view these challenges as opportunities for innovation. By supporting startups that address critical issues such as charging infrastructure and heavy-duty EV applications, we are contributing to overcoming these barriers,” Chandan said.

“India's transition to EVs is not just an environmental necessity; it’s a transformative opportunity to reshape the future of transportation. With collaborative efforts from industry, government and investors, I am confident that the EV sector will overcome these challenges and unlock its full potential in the coming years,” he added.

BizDateUp’s future plans in the EV space

Looking ahead, BizDateUp plans to deepen its engagement in the EV ecosystem. Its focus will remain on fostering technological innovation by supporting startups that address core challenges such as charging infrastructure, battery costs, and supply chain dependencies.

It will also be looking at enhancing last-mile connectivity by promoting mobility solutions that improve logistics efficiency while being sustainable.

BizDateUp is also looking at expanding industrial applications by investing in solutions like heavy-duty trucks that cater to specific industries and drive operational sustainability.

“Our vision is to create an integrated EV ecosystem that not only drives adoption but also ensures long-term sustainability for India’s transportation needs. We are committed to partnering with forward-thinking entrepreneurs and innovators to shape the future of electric mobility in the country,” Chandan concluded.