Capital A, a venture fund for seed to early-stage startups, has announced the launch of ‘Evolve’, a $10 million cleantech fund to further India’s electric vehicles (EV) ecosystem.
The fund will back early-stage startups developing electric vehicles (EV), EV batteries, battery management systems, battery-as-a-service, and charging startups.
The company said it would also help fund firms working on after-sales support and OEMs (original equipment manufacturers).
Via the cleantech-focused fund, Evolve, Capital A will also look at various tie-ups with academic institutions focusing on the EV sector.
Shifting gears: The EV revolution in India
The fund launch comes after Finance Minister Nirmala Sitharaman announced the government’s plans to develop special mobility zones for EVs and a battery-swapping policy during the Budget 2022-23 speech. Not only that, with the roll-out of FAME II, the Department of Heavy Industries allocated Rs 1,000 crore for setting up EV charging infrastructure in India.
Meanwhile, the Delhi government unveiled draft guidelines for regulating the transportation activities of tech aggregators. The Arvind Kejriwal-led government has instructed all its departments, autonomous local, and bodies to identify suitable locations and install public electric vehicle charging stations at their premises.
Moreover, players like Ola entered the market with electric 2-wheelers.
Miles to be covered
However, the adoption rate of EVs in India is moving sluggishly. According to recent research by Accelerated e-Mobility Revolution for India’s Transportation (e-amrit) portal, only 7,96,000 EVs were registered till December in India, and 1,800 charging stations were installed in public places.
Sales of EVs grew 133 percent from FY2015-2020. Compared to conventional internal combustion engine (ICE) vehicle sales, the numbers seem insignificant.
According to Capital A, India needs charging infrastructure for 2-, 3-, 4- wheelers and commercial vehicles to make the transition to EVs widespread.
“With the launch of electric 2- and 3-wheelers that can overcome range challenges, EV adoption, especially in the commercial segment, is going to lead to an early-stage transition with a large number of such vehicles expected to enter operations.
“What is needed now is funding support to promising EV OEM startups and companies,” said Ankit Kedia, founder, Capital A.
“We have launched the fund after having developed an active thesis and forging industry partnerships that enabled us to gain deep insights into the Indian EV market. We aim to back founders building impactful startups.”
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