Illuminating The Future Of EVs; Bounce Infinity Raises $20 Million From Sequoia And Other Investors
The Bengaluru-based smart mobility solutions (EV) company that has unveiled its first consumer electric scooter – the Bounce Infinity E1, plans to raise around $20 million in funding to scale up its electric vehicle (EV) business. The Bounce Infinity E1 has a unique ‘battery as a service’ option – a first of its kind in the Indian market. “Fortunately, we are well financially secured. We have the support of our investors. We are also in contact with new investors. But our vision is to make electric cars mainstream in India,” said Vivekananda Hallekere, CEO and co-founder of Bounce.
Bounce competes with electric two-wheeler manufacturers like SoftBank-backed Ola Electric, Ather Energy, Hero Electric, Bajaj’s Chetak, TVS Motor Company, and Boom Motors. Backed by Sequoia, Accel, and B Capital Group, the firm has raised more than $220 million in funding. Bounce has acquired a 100% stake in 22Motors in a deal worth around $7 million in 2021, including its state-of-the-art manufacturing facility in Bhiwadi, Rajasthan, which has an annual capacity to produce 180,000 scooters.
Considering the potential of the Indian market, the company plans to set up another plant in South India. Bounce has earmarked $100 million to invest in the electric car business over the next year. “If we can have the infrastructure to replace batteries for 2 million scooters in the next few years and if we can sell at least 1-2 million scooters annually, that’s a success story for us,” Hallekere said.
In 2019, Bounce became the fastest growing bike sharing company in the world with 60,000 rides per day. This number has increased to 120,000 rides per day by 2020. The firm’s valuation exceeded $500 million after raising $105 million last year.
Founded in 2014, the start-up has grown to become a global player, including American scooter rental companies Bird and Lime. It had plans to expand domestically and also reach markets abroad.
Then the Covid-19 pandemic hit. When the government announced restrictions to limit the spread, its users, especially employees, and students, were locked in their homes. Bounce laid off employees and co-founders Vivekananda Hallekere, Varun Agni and Anil G took a 100 percent pay cut.
Electric Vehicle Industry in India: Growth Objectives
With the transition to electric vehicles, India can benefit on many fronts: it has a relative abundance of renewable energy sources and the availability of a skilled workforce in the technology and manufacturing sectors.
According to a report by the CEEW Center for Energy Finance (CEEW-CEF), by 2030, the EV market in India will represent a benefit of USD 206 billion if the nation maintains its gradual progress toward its ambitious 2030 target.
In 2021, India’s EV industry attracted investments of USD 6 billion and is becoming increasingly attractive to private equity/venture capital investors.
Another study by IESA projects the Indian electric vehicle market to grow at a CAGR of 36 percent by 2026. The EV battery market is also expected to grow by 30 percent over the same time frame. Meanwhile, this market is supposed to grow at a CAGR of 49 percent during the period 2022-2030, according to an IESA report. Overall, the EV industry is expected to create 10 million and 50 million direct and indirect jobs respectively by 2030.
Launch of ‘e-AMRIT’ Portal: One-Stop Platform for Electric Vehicle Information,
India launched the e-AMRIT website, which will give all the information about electric vehicles. It addresses key concerns around EV adoption and purchase – such as charging station locations and EV financing options, as well as information on government policies, and investment.
EV ecosystem and investment outlook in India
Regardless of the country’s ambitious goals, India’s EV space is in its infancy. But if we look at it differently – India offers the largest untapped market in the world, especially in the two-wheeler segment. 100% FDI is allowed in this sector under the automatic route.
The federal government is also prioritizing a shift towards clean mobility and the recent moves to modify the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) II program. Under the second phase of the FAME program, about 469,315 electric vehicles have been supported through demand-side incentives of around INR 18.69 billion as of 11 July 2022. Approval has been given to 6,315 electric buses and 2,877 EV charging stations in 68 cities in 25 states/Union Territories.
50 original equipment manufacturers (OEMs), both emerging and established, have registered and revalidated their 106 EV models. The establishment of 1,576 charging stations is approved on nine expressways and 16 highways.
The aim of more usage of EVs is to be achieved by stimulating new investment in the development of domestic supply chains for key technologies, products, and automotive components.
Incentive schemes linked to production
In May 2021, the government introduced a Production Linked Incentive (PLI) program for ACC Battery Storage Manufacturing, which will encourage domestic production of such batteries and reduce dependence on imports. This will support the electric car industry with the necessary infrastructure and will significantly reduce the cost of electric cars.
Electric car sales in India to grow by over 2000% from 2019 to 2022
Over the previous three years, EV sales increased by more than 2,218 percent; more than 4,42,901 EVs were sold in FY 2023 (through December 9), compared to 19,100 in FY 2020.
Emerging market players
Many leading battery manufacturers, such as Amara Raja Batteries, have taken a cue from these incentives to steer new investments into green technologies, including lithium-ion batteries.
In April 2022, European renewable energy company, Eren Groupe, bought one of the world’s most energy-dense batteries with a capacity of 54 MWh, developed by Bengaluru-based battery startup – Pravaig, for its data storage applications. The high density means the battery delivers more energy per atom, which has proven cost-effective compared to alternatives such as sodium-ion or aluminum-air.
The battery developers also informed us that it takes only 30 minutes to charge the battery fully. This new acquisition of the European company will not only boost domestic production but also pave the way for more fuel-efficient electric cars, as batteries typically account for 35-40 percent of the total cost. Responding to the opportunity presented by the Indian EV industry, many leading industry players such as Ather Energy, OLA, and Mahindra Electrics are increasing their presence in the market.
Moreover, some states like Karnataka and Tamil Nadu are implementing innovative and timely investor-friendly policies in addition to building the necessary infrastructure. More than 27 states and UTs have formulated strategic plans for mobility transformation to provide safe, inclusive, economical, and clean transportation options to their citizens. States like Tamil Nadu and Karnataka have had a head start with pre-planned public policies, targeted incentives for investors, and supporting infrastructure, other states have also developed policies to stimulate market demand and create infrastructure.
The Government of Assam will convert all government vehicles and its fleet of public buses to EV alternatives. Most recently, in June 2022, Haryana joined electric vehicle deployment in the state. Haryana aims to be an EV manufacturing hub while developing an enabling ecosystem to scale adoption – through the development of charging infrastructure, skill development, and R&D in EV technology.
The Haryana state government has declared 2022 as the ‘Year of Electric Vehicles’.
In April 2019, the federal think tank Niti Aayog published a report titled “India’s Electric Mobility Transformation”, which put the penetration of electric vehicle sales in India at 70 percent for commercial vehicles, 30 percent for private cars, 40 percent for buses, and 80 percent. percent for two-wheelers and three-wheelers by 2030. If achieved, these targets could lead to a net reduction of 14 petajoules of energy and 846 million tonnes of CO2 emissions over the lifetime of vehicles in use.
edited and proofread by nikita sharma
