How Vidyuttech, founded by Swiggy, Bounce execs, is enabling financing for commercial electric vehicles

Days Ola Electric and Okinawan Electric scooters caught fire in India, Tesla almost sold out 6,000 electric cars in the USA. The two incidents are unrelated but, at the same time, very revealing of the EV (electric vehicle) market in India, which is still in its infancy.

India is still a few years away from seeing the type of electric vehicle revolution that has unfolded in the United States due to a host of factors such as a lack of charging infrastructure, capacity gaps manufacturing, inadequate financing options, etc.

Gaurav Srivastava—an alumnus of IIT Kharagpur who has worked with Bounce as one of its key leaders in the EV industry, saw the shortcomings of the EV industry in India and decided to tackle the issues of lack of financing options and the conundrum of resale in the sector.

He teamed up with Xitij Kotian IIT Bombay alumnus who has worked with startups such as Rivigo and Swiggyand founded Vidyut Tech in 2021.

Bangalore-based Vidyuttech is a digital platform that offers flexible financing solutions and assured resales of small commercial electric vehicles.

The dilemma of commercial electric vehicles

Ola, Okinawa, Ather Energy and others have played a huge role in catalyzing the adoption of private e-scooters in the country, but there’s an even bigger opportunity to be seized in the EV business space.

The global commercial vehicle electric vehicle market is expected to reach $258.78 billion by 2027 growing at a CAGR of 25.10%, from $67.51 billion in 2021, according to a report by Mordor Intelligence.

However, there’s a reason why the commercial electric vehicle segment has remained largely nonchalant and has seen very few takers.

“The customer journey for commercial electric vehicles in India is quite interrupted…there is a severe lack of knowledge about buying, maintaining and reselling electric vehicles,” Xitij said. Your story.

Electric vehicles in commercial space are currently limited to two- and three-wheeled vehicles, primarily used for last-mile delivery services. Electric trucks like those from Tesla have yet to see traction, takers or manufacturers in India, but two- and three-wheeled commercial electric vehicles have attracted interest from aggregators and individuals.

Xitij says two main things have kept commercial vehicle operators and aggregators away from the EV space so far:

  • Lack of financing options: As the space is new and uncharted, underwriting EV loans has become a difficult task for most financiers who do not want to spend resources on trial and error testing underwriting parameters. Moreover, the few options available are very expensive in terms of interest rates and down payment requirements.
  • Lack of value visibility when reselling: Secondary markets for EVs are not yet fully developed in India, as the EV phenomenon itself is so new – and therefore commercial vehicle operators looking to resell the asset after some time don’t know how much of their initial investment they could get back.

This is what prompted Xitij and Gaurav to seek solutions in the form of Vidyuttech. The startup, which has 20 employees, currently only works in the utility vehicle segment, and has linked up with OEMs (original equipment manufacturers) to enable used electric vehicle sales, as well as purchases.

It also offers interest-free financing for the replacement of batteries, as well as loans for the purchase of vehicles, through partnerships with NBFCs (non-banking financial companies).

business model

For its loan product, Vidyutech charges 18-22% interest. The high price is due to the fact that commercial electric vehicles are a unexplored and untapped market, and the startup says there is a a certain degree of risk linked to the granting of these loans, especially because India is still in the early stages of EV adoption.

Utility vehicle operators wishing to take advantage of its financing product also have access to its resale platform, where Xitij says customers can get up to 40 percent the original price they paid for the vehicle.

Vidyuttech is currently working on refining its EV aftermarket and hopes to make it a leading platform for EV resale in the future.

It has three main distribution channels:

  1. Its own sales and marketing team
  2. Electric vehicle dealers and OEMs who sell or manufacture electric vehicles and refer those seeking financing options to Vidyuttech
  3. Logistics service providers

Its customers are private drivers, owners of small and medium-sized last-mile delivery fleets, and mainly companies for which logistics is a cost center, such as gas bottle delivery companies, etc.

The startup did not comment on the value of transactions processed so far on the platform, or the total loans it has disbursed, but said it had “sanctioned loans for hundreds of vehicles in during the first two months of its publication”.

He also declined to disclose his funding status.

Vidyutech’s competitors in electric vehicle financing include non-bank lenders such as Shriram City Union Finance, Wheels EMI and Cholamandalam Investment & Finance Co, as well as players such as RevEnd.

The electric vehicle finance market is expected to reach an opportunity of Rs 40,000 crore by 2025, government think tank NITI Aayog and Rocky Mountain Institute (RMI) India said in a report titled “Banking on Electric Vehicles in India”. “.

The market could expand to Rs 3.7 lakh crore by 2030, according to the report, adding that financial institutions, including banks and NBFCs, have an important role to play in accelerating the adoption of electric vehicles and support the decarbonization of road transport in the country.

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