Fundraising for EV startups and battery compound companies
To reduce dependence on China for imports, EV companies are also pushed to set up local manufacturing facilities thus, leading to enhanced requirements of funds and opening up opportunities for investors
The pandemic has led to large-scale distress to electric vehicle supply bases, assembly plant closures due to their dependency on imports from China which has made it a challenging situation for the Indian EV players. The Galwan border tension between India and China has further strained the relations.
Talking to ETAuto. Dilip Dusija, Partner, Deloitte India elaborated, "As regards the scenario for funding in EV space is concerned, it is definitely going to get impacted due to what’s happening around us but that will be a short term phenomenon because there is so much of focus on EVs in India by the government and a lot of policies going forward will be more conducive to promote EVs. The recent Make in India/vocal for local focus is also going to push investments in electric vehicle space."
The Deloitte analyst said, "Chinese investors are not the only investors in VC space. We are all aware of Japanese money coming into India, either directly into early-stage deals or through the fund of fund route. Not just financial investors but even strategic investors from Japan have shown interest in early-stage deals in India."
He further added, "Then there are social/impact funds (mostly US-based) who want to invest in technologies which are more environment friendly, so that's another bunch of investors who are looking at this space very closely. Not to forget, a lot of strategic investors and corporates in India itself who want to back this space. Funds backed by HNIs and family offices have also started testing waters in early-stage deals."