Based on a study, half of the auto start-ups since 2000 are based in US or China. Among the 30 highly funded start-ups, only 4 are from Singapore, EU, India, Dubai, the rest from China & US equally. Off late, Automotive start-ups have been inclined to 5 poles i.e. Electric, Autonomous, Connectivity, Shared mobility and “Leveraging China” while investors are inclined more to certain bets than newcomers as per latest funding research by Oliver Wyman. Moreover, to get the right amount of money for a new start-up in India, one must have right backing or an idea for disruptive business impact.
Electrification & Connectivity as a technology is already in a growth phase, Autonomous is highly capital intensive while Shared mobility takes a hit in short term due to COVID. However, these 4 have become the play of big OEMs now and are intrinsic part of their strategy with suitable early start-ups already engaged. Moreover, China in current scenario is a risky bet thus there is a need for automotive start-ups to come out of these 5 poles and re-orient.
COVID episode had a counter-effect on investments by Indian auto Manufacturers. Recent news confirms that a few of them written-off loss-making EV start-ups/Subsidiaries. Bharat Forge pulled out of Tevva Motors (technology for 7-14T CVs for use in city), AshokLeyland takes hit on Optare Plc UK-based EV maker while Mahindra planned disengagement with GenZe which started as an incubator-funded startUp in 2012 for developing IoT-connected e-Scooter in California. However, TVS continues in Ultraviolette Automotive, Likewise Bajaj Auto invested around $8 million in Yulu, a Bangalore-based e-bike-sharing platform for Last mile connectivity.
Will there be a brighter situation for “Product” start-ups to regain attention from automobile manufacturers in India? What could those newer areas of Interest be? Probably very hard questions to answer. Off-course, business analytics coupled with IT can be India’s forte and is coming up in a big way thus Big Data, Cloud, IoT, AI, ML, Blochchain, Digital Twins, AR/VR, Industry4.0 have a big place in Automotive industry too. Solving unique business problems using these Tech e.g. predictive model for failures, remote diagnostics and multiple Services/Safety Star-Ups etc are here to stay. We can never forget revolutionary logistics start-up Rivigo which invented RaaS (Relay-as-a-Service) model addressing biggest challenge of CV Industry i.e. Driver Shortage and their standard of living.
Specifically, on mobility Product start-ups, a number of them burgeoned in 2-3Wheelers EV segment in India to have achieved local assembly with SKD kits but the performance focus and know-how with majority of these start-ups is far-fetched thus differentiation and sustenance is under scanner. I feel, focus on Supplementary opportunities linked to EVs and relevant public transport solutions could be the next hope for mobility product start-ups in India.
EV inherently suffers with higher weight, disruptive solution to reduce weight is an opportunity. Israel based start-up Bamboobike Technologies limited founded in 2015 is the only start-up in mobility which uses bamboos natural carbon for light weighting, it claims 3-4 times the range and boasts of solving pricing problem as well as e- powertrain efficiency. Since the city duty-cycle are not so arduous, bamboo mobility could be the way to go along with EV for cities. Or why not something like Phinergy which will bring us Aluminium-Air battery at 1/8th size and weight efficiency, no wonder IOCL is invested in this Israel based company. Mumbai based “Log9 Materials” is another example which is focusing on low cost Aluminium-Air fuel cell towards Lithium Independence.
While EV’s maintenance costs are low, the cost of off-road remains the same whether it is EV or conventional vehicles. Skill gaps & challenges to establish parts reliability in Indian environment of dust, heat, road Infrastructure, floods would cause a lot of uncertainty in spare parts management and swelling servicing times in case of EV breakdowns. Thus, vehicle architecture with swappable “Powertrain Cradle” module designs could help minimise down-time to solve this growth phase issues. Complex electronics or the powertrain issue? Just swap with a float at dealerships and be done with it. It could also act as conversion kits. Moreover, with the high reliability/life of EV aggregates the opportunity opens up for ideas to improve reliability/longevity of other systems to the same extent. The unitised bearing, long life linings. alloy wheels haven’t been adopted well for long due to cost arbitrage not justifiable due other fuses in the vehicle causing early off-roading thus never really helped get ROI in practicality. This could be the time to couple them for enhanced overall Total Cost Of ownership.
A lot of mini passenger transports are built in India with EV SKDs, they have not yet been really innovative on vehicle architecture to utilise form flexibility of EV packs which could be utilised for most space efficient and stable feeder transport for short distances. The individual hub-End motors and battery in various shapes is a boon unharnessed in India for last mile connectivity. A concept of 7-10 seater flat floor van with complete drive pack as cradle in the rear or front of the vehicle offering self-cleaning interiors inspired by Metro coaches can be a premium mini feeder similar to COBUS. This concept could pull in semi- premium customers who are shying away from Metros due to poor quality of last mile connectivity. Metro Infrastructure utilisation is bad, not because of feeder unavailability but due to lack of rightly positioned feeders with apt hygiene, cleanliness, safety and elegance.
Already mentioned in my last article, Micro mobility is another element not to be ignored, it may come up due to COVID scenario. Citron’s 2CV concept, Renault Twizy, and the Swiss Microlino (2-seater Car) revival could show the way, who knows TATA Nano and Mahindra’s quadracycle may find their new Avatars. Yesterday, one of my friends from Czech connected with me to inform that he made an electric powertrain for wheel-chair, I was pleasantly surprised to see his road trial videos, this could be a simplistic micro transport I can imagine.
Modular architecture which Scania leveraged for decades and a lot of OEMs tried in varying degree of success, remains unharnessed in India in my view. A few OEMs attempted in India but it didn’t work out in the way expected due to inherent rigidity to sweat-out the assets from old investments. Believe me, I have gone through full Modular development cycle from Scratch to vehicle build witnessing those inflexibility with established OEMs but there are no such constraints with start-ups, they for sure can protect a wide range of variants with just 10-20% extra efforts/investments upstream with the same number of parts. This traditional tool needs re-discovery among start-ups for scale and a real new product differentiator, it can work for big Play Start-Ups. One can study Scania model which i happen to study deeply over the years, or if you need EV specific then get inspired by AEV Robotics.
On the periphery, last but not the least the EduTech is still a big opportunity in automotive field in India since automobile engineering syllabus in universities are still age old, concepts are taught well but as a disconnected array. Every kid is connected with mobility in the form of toys since childhood, something to spark this curiosity could be another need to cater. Automotive learning / skill up interventions have a good chance, like the way SkillLync and AutoBot India have emerged to take ground.
It is high time, Product Start-Ups should re-orient focus to bring unique value or package the products with allied services as a complete solution. Start-ups shall stand out from the crowd by pitching granular metrics specific to their business model, since in the end it’s the “Solution” which sells, not a product, not a service. Start-Ups can placate investor anxiety by establishing and validating ROI, and use them well to illustrate how additional investments in the business can accelerate or increase further profitability.
Disclaimer – This article is written in full personal capacity and free of charge. This has no conflict of interest with the organisation I work or the current role I perform in the organisation or the information I have access in the organisation. This write-up expresses personal views purely based on information easily and widely available in public domain. Rights to reproduce is protected with self.
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