Q1: The electric vehicle space in India has shown remarkable growth in investments over the last three years with close to $ 1 bn (as per IIC’s internal analysis) raised in 2022 alone. As someone with a strong focus on sustainable mobility linked solutions, what is your observation on the sector’s growth and current outlook? Any notable trends that you have observed and would like to share with our readers?

The EV sector in India has witnessed a remarkable surge, particularly in the last three years. According to a Bloomberg article published in late November 2023, with automakers having committed nearly $5.4 billion in investments to set up or expand their EV manufacturing facilities in India, it's clear that sustainable mobility is not just a trend, but a structural long-term shift. A notable trend we've observed is the diversification within the sector – from two-wheelers to commercial vehicles, each EV segment is experiencing growth. Additionally, the increased government support and consumer awareness about environmental issues are significantly propelling this sector forward.

Q2: One segment that we see fast gaining traction is that of battery charging solutions for electric vehicles. Given that Battery Smart and Electric Pe form a part of your portfolio, what is your investment thesis on such solutions? Do we see an increasing pipeline of such solutions coming up in the near term?

Imagine a family in a bustling city like Mumbai or New Delhi decides to switch to an EV, attracted by its eco-friendliness and lower running costs. But its enthusiasm wanes when there is a realization that there just aren't enough charging stations on daily routes taken. This scenario underscores the critical need for robust battery charging solutions for the EV revolution in India to truly take off. Our investment in companies like Battery Smart and Electric Pe stems from stories like this. We're seeing firsthand, the struggles and the growing demands of EV users, which leads us to believe in the necessity of efficient and accessible charging infrastructure. I recall a recent conversation with a young entrepreneur in Bangalore, who mentioned that the absence of fast-charging stations near his office was the only reason holding him back from buying an EV. It’s encounters like these that highlight the burgeoning need for innovative charging technologies. We do anticipate a strong pipeline of innovative charging technologies in the near term, especially those offering faster charging times and wider network coverage.

Q3: As we see an increasing number of EV OEMs coming up, what would be those distinctive features in a business model that lend themselves to growth capital? Any examples that you would like to highlight from your mobility portfolio that stand out for the innovation they have built?

In the burgeoning field of EV OEMs in India, certain features stand out for attracting growth capital. These include innovative use of technology, scalability of business model (in India, particularly, the attractiveness of any industry comes from the scability in connection thereto), and a strong focus on sustainability. For instance, in our portfolio, Emotorad, an electric bike manufacturer, has positioned itself as a leader in the e-bike industry through several innovative strategies and developments. The company, founded in 2020, has made significant strides in challenging the dominance of Chinese manufacturers in the global e-bike market. It has a dedicated tech manufacturing facility in Pune, where the company’s tech team works on developing proprietary technology for its products. This includes smart features and enhancements that improve the functionality and user experience of Emotorad’s e-bikes. Furthermore, the company offers a wide range of e-bike models, catering to various user needs and preferences. This diversity in product portfolio is a significant aspect of Emotorad’s innovation, allowing the company to appeal to a much wider customer base.

Q4: We see that the EV ecosystem would require increasing technological solutions that could build its sustainability; for example - solutions like battery recycling. Are there any such specific areas with the EV value chain, that you believe, possess substantial investment opportunities yet remain relatively untapped?

In India's rapidly growing EV market, battery chemistry and battery recycling are both gaining significant attention for their respective investment potential. The diverse Indian climate demands that EV batteries are developed with high-temperature resilience, making innovative battery chemistry vital. This innovation is not just about handling the heat but also about creating batteries that are cost-effective, lightweight, yet energy-dense to enhance vehicular performance and range. This is crucial in a market like India where price sensitivity is high. Furthermore, as EVs become more mainstream, the importance of sustainable battery disposal and recycling becomes paramount. Effective recycling processes are essential to prevent environmental pollution and conserve finite resources like lithium, which is a critical component of these batteries and not easily available or accessible in India. This also ensures compliance with environmental regulations which are becoming increasingly stringent. Beyond batteries, there are promising investment opportunities in other areas of the EV ecosystem, for example, software solutions for EVs and improvements in the efficiency of charging infrastructure. These innovations align closely with India’s SDGs, paving the way for a more environmentally friendly future in transportation.

Q5: Green Frontier Capital recently funded Euler Motors, which also saw investments from investors such as British International Investment and Blume Ventures. In your opinion, what could be the pathway for building more partnerships and alliances with stakeholders, that could inspire investments across the EV ecosystem?

Our recent funding of Euler Motors, supported by prominent investors, highlights the potential for building strong partnerships in the EV ecosystem. To inspire further investments, it is essential to foster an environment of collaboration among stakeholders. This includes public-private partnerships, j-v’s between technology providers and manufacturers, and alliances with financial institutions. Encouraging policy support and sharing best practices can also play a vital role in attracting diverse investors and partners to the EV sector.

Background of Green Frontier Capital

Green Frontier Capital is India's first investment firm that focuses on growth companies which are delivering breakthrough innovation in green industries. These industries include Electric Mobility, FoodTech, AgTech, Renewable Energy, BioFuels, Waste Management, Clean Water, Sustainable Lifestyles, etc.

As India’s first Climate Change-focused VC fund it is focused on investing in startups delivering breakthrough innovation in line with the UN’s and India’s SDGs, more specifically, Climate Action.