Blume Ventures’ Arpit Agarwal on what it would take for India to successfully tap the electric mobility market
Technology is driving the change in India’s automobile industry as the focus shifts from Internal Combustion Engine (ICE) to electric vehicles. India’s leading mobility startups like 2026.and automobile companies like Hero and are also claiming a stake in what was a $5 billion industry in 2020. And what’s more, the Indian electric vehicle market is further expected to reach $49 billion by
In a conversation with Siddhartha Ahluwalia, Founder and Host of 100X Entrepreneur, Arpit Agarwal, Director atsaid that the electric vehicle market can be seen as a replacement of the entire auto market in India. “To me, everything that is Internal Combustion engine driven can be an electric vehicle. There was a time when diesel locomotives were very common, and today diesel locomotives are becoming unusable.”
Naturally, the auto components industry, a $240 billion opportunity - that contributes to eight percent of India’s GDP — could then be “thought about in an electric manner.”
EV for the Indian roads
Arpit believes that India was deprived of good quality vehicles for the longest time. “Because not enough entrepreneurs applied their mind and built a vehicle from scratch. Almost everyone was trying to play the cheap Chinese mobile strategy where they would import a kit from China and build a vehicle in India.” However, they do not weather the Indian road conditions and expectations from Indian consumers.
The VC investor dwells on his own childhood when it was common to see a family of four riding a two-wheeler about two decades back, stating that Indian customers expect a lot more from their vehicles and road conditions are far worse.
“So you can bring something from China but it will not last. Electric batteries are also temperature sensitive. Lack of quality vehicles then is also hindering EV adoption,” Arpit said.
The key challenge, he emphasises, lies in figuring out ways to charge a vehicle after it is made and designed.
“This is one of the important cold start problems of India. Not enough charging/swapping exist because not enough electric vehicles are on the street. There's not enough demand and so there's not enough supply and this becomes a vicious cycle that no one is able to break. Even if demand exists, the availability of charging facilities is so low with little penetration.”
For startups operating in the sector, Arpit assures the market is well and alive, with just the market for two-wheelers and three-wheelers making for 300 million batteries.
At present, an installed base of 2.5 million e-rickshaws means 5 million potential batteries needed in the market. About half a million e-rickshaws and more than 20 million two-wheelers are sold every year. Citing these data, Arpit added that the EV components make for a humongous market that is going to grow very fast.
Betting on the EV market
According to Arpit, the future is CASE - which expands to Connected, Autonomous/Automated, Shared, and Electric.
He shares that the commercial vehicle segment is an important segment which is Total Cost of Ownership (TCO) positive which makes it rational for people to adopt new technology.
For any vehicle, electric or otherwise, batteries make up 50 to 60 percent of the cost. With an EV’s potential to reduce the battery cost, more segments will become TCO positive and thus allow for more people switching to electric mobility.
While early-stage VC firm Blume Ventures has backed three startups in the EV segment so far, Arpit remarked that the firm has been working with several funds for Euler Motors and other companies, most late-stage funds are still making up their mind and don't understand this market very well.
"If you are an entrepreneur who's trying to make a new vehicle, I would ask you why will I invest in you? The answer should always be I can do it faster and cheaper. Only then you will be able to find a lot of people investing in you,” he quipped.
Although there aren’t enough solutions today, Arpit assures there is a massive opportunity, and the story of electric mobility will be like that of “software eating the world.”
To know more, listen to the entire podcast here.
02:40 - Future of EVs in general
06:01 - Adoption by TCO positive segments
07:25 - 5-year use case of an electric scooter
10:13 - Key challenge in EV market
17:22 - Challenge with charging stations
24:30 - Opportunities for EV in India under various sub-segments
32:53 - Large players engaging with the EV ecosystem
34:12 - Funding & duration of developing an EV from scratch
37:28 - Future of mobility C.A.S.E.