How Zelo Electric is building affordable EVs for small-town India
With prices starting at Rs 38,990 and a growing dealership network, the bootstrapped startup is targeting the affordability gap in India’s two-wheeler EV market.
In India’s Tier II and Tier III cities, where fuel costs strain daily budgets and two-wheelers are essential for mobility, the dream of owning an electric vehicle is still out of reach for many. High prices and a lack of easy loan options have made it hard for people to buy electric vehicles. Zelo Electric, an Ajmer-based company, is trying to change that by building affordable, practical scooters tailored to the needs of small-town India.
The company was founded in August 2021 by Mukund Baheti, who completed his MBA from NMIMS CDOE, and his brother Aditya Baheti, who also holds an MBA from IBS Mumbai and previously worked as a relationship manager at HDFC Bank.
Zelo Electric builds low-cost electric scooters designed for India’s small towns and price-sensitive buyers. Their starting models are priced at just Rs 38,990, and even the highest-end version doesn’t cross Rs 70,000. “When the COVID-19 pandemic hit, we decided that we also had to build something of our own, which should be meaningful, practical for everyday consumers. So we started researching the EV space,” Mukund Baheti says.
Bridging the affordability gap in EVs
During their early research, the co-founders identified a major gap in the EV market: affordability. While many customers were willing to shift from petrol scooters to electric ones to save fuel costs, they were hesitant about the high upfront prices. “Scooters were expensive, and while people wanted to save money in the long run, they weren’t ready to pay so much at the start,” Baheti says.
The company has four active models, and among those, it has two series: non-RTO and RTO-approved. The first model, Zoop, launched in 2022, starts from Rs 38,990. Since then, the company has introduced three more models- Knight, Zaeden, and Zaeden Plus, the latter being an RTO-approved version with a 100-km range.
Unlike most EV startups targeting urban buyers with high-end features and connected apps, Zelo’s focus is different. “We have a product for everyone. We offer both lead-acid and lithium-ion battery variants to suit customer budgets,” Baheti says. Lead-acid batteries are cheaper, though they require replacements every 1.5 to 2 years, making them ideal for cost-conscious users.
Zelo scooters are not manufactured in-house. Instead, the company operates on a semi-automated assembly line model, partnering with component makers and assembling scooters at their facilities. The company has 25+ partnerships across India and globally, which help it maintain quality and keep costs low. Each unit takes just 15 to 20 minutes to assemble.
“All our scooters are assembled using a semi-automated process involving machines and manual work. Everything, from batteries to tyres to control systems, comes from reliable suppliers,” Baheti tells YourStory.
The battery partner, Inverted Energy (based in Noida), has research collaborations with Bosch, General Electric, IIT-BHU, and others. “We’ve used their batteries for over three years, and we’ve never had a single serious incident like a fire. That’s something we’re proud of,” he added. Tyres come from TVS, and other components like motors, controllers, and anti-theft systems are sourced from various top-tier Indian and international suppliers.
The scooters are built on a metal chassis, with body parts made from polypropylene plastic and ABS (Acrylonitrile Butadiene Styrene) plastic material. Zelo also uses smart batteries with BMS (Battery Management Systems) that allow diagnostics via computers, which makes the maintenance more predictable and safe. However, after-sales diagnostics and service logistics are handled by the battery OEM, Baheti explains.
Currently, Zelo operates out of Ajmer, Rajasthan, with a team of 70 employees. To support operations, Zelo has implemented a Dealer Management System (DMS), built by a third-party software company. “The DMS handles everything, from order placements to warranty claims. Dealers can track inventory and service issues in real time,” Baheti says.
The startup does not currently offer a customer-facing app, but it plans to include more smart dashboard features and connectivity in upcoming models. “We are converting some of our non-RTO models into RTO models with new designs and technology like smart dashboards, connectivity, and upgraded safety features,” he said.
Dealer-led growth and expansion strategy
Zelo follows a dealership model and currently has 70+ dealers across 30+ cities in states like Rajasthan, Uttar Pradesh, Madhya Pradesh, and Gujarat. Cities like Ahmedabad, Agra, Jodhpur, and Palanpur are already active markets.
“Our goal is to reach 100+ dealers by the end of 2025,” Baheti says, “Initially, we started with areas close to us so we could manage service and quality better. But we’re now expanding to southern and western India.”
The company's sales model is simple: partner with reliable dealers and build on-ground trust. “We don't rely on big marketing budgets. Instead, we build relationships. That’s what helped us onboard our early dealers,” he says.
The company is completely bootstrapped with Rs 5 crore from the family’s initial investment. It is currently growing at 75% year-on-year, fueled by rising consumer demand and expanding dealer networks.
The EV space is crowded, with big companies like TVS and new-age startups like Ola Electric dominating headlines nowadays. But Baheti believes Zelo’s position in the affordable segment sets it apart.
“Our real competition isn’t Ola or TVS, it’s the gap in the market. We are focused on serving people who can’t afford a Rs 1 lakh scooter but still want something reliable and good-looking,” he says. Even at lower price points, Zelo includes features like anti-theft alarms, follow-me-home lighting, and mobile charging ports in its models.
“Our scooters offer affordable yet premium features. It’s not just about cutting costs, it’s about delivering value,” he adds.
Challenges, and what’s ahead
One of the biggest challenges for Zelo is getting financing for customers. “Financing is still a big problem. Many banks and NBFCs don’t want to give loans for electric scooters, especially the non-RTO ones,” Baheti says. This makes it harder for people to buy EVs, even if they want to. Even though sales are growing, electric scooters still make up only about 3% of all two-wheelers in India.
Still, the market potential is massive. According to Baheti, India’s EV two-wheeler market is expected to hit $8 billion in 2025, growing at around 40% year-on-year. Zelo is aiming to capitalise on this by offering easy EMI schemes and expanding financing options through partnerships with local banks.
“We’re working to make our product 100% Made in India,” Baheti says. “We’ve already localised parts like tyres and chargers, and now we’re focusing on shockers, mirrors, clusters, and even small components.”
In the coming months, Zelo plans to launch Knight Plus, which is an RTO-compliant upgrade of its Knight model. This will bring Zelo’s RTO portfolio to two scooters, with more in the pipeline. The startup’s goal is to eventually convert all successful non-RTO models into RTO-compliant versions, expanding their usability and reach.
Additionally, the company is also preparing to expand into the western and southern parts of India soon.
Edited by Jyoti Narayan