What will give you an Edge?

Last week, we pondered why there is no Tesla-level success story in the electric two-wheeler space. There are popular brands in individual markets, but none of them has created a significant technology edge or a global distribution network.

Where is the E2W Tesla?

Electric mobility for the masses would be driven by two-wheelers. The real success of the E2W revolution would be if it managed to create a Tesla-scale global success story in two-wheelers. Unfortunately, even the most significant players are regional and small. Would that change?

Insight EVTeam InsightEV

What worked for Tesla in its early years was the edge it created through technology and user experience differentiation. From offering technology-rich yet relatively spartan interiors to company-owned experience centres, Tesla created differentials at every stage. Eventually, the large edge it enjoys today is the sum total of the small ones it created in every process.

However, Tesla's biggest edge was stealth. It could disrupt things even before anyone noticed it. By the time the traditional industry could adjust its technology spending and car programs, Tesla had already raced away to a formidable lead.

However, electric two-wheelers startups don't have that luxury.

We are in that perilous time when easy money is over, competition is high, and the incumbents won't let you have your cake easily. Importantly, investors are smarter as they have been burned by the first wave of startups.

Arguably, things were better five years back when everyone was starry-eyed and high on something. Some of the big-name startups today raised generous money in that time and have had a comfortable going. This funding has been concentrated on a few startups, even as most of the others perished or pivoted. It's the nature of the beast.

A Few Baskets Get Most of the Eggs

Why do some E2W/L-category vehicle startups get massive funding, while many die without support? What do investors look for? Does everything make sense? What makes startups attractive? We dug through 15+ years of funding data to identify trends. Then, the question: What is the RoI for investors?

Insight EVTeam InsightEV

Are Investors Failing the Industry?

Continuing from last week: Innovation and technology were strong drivers of success in the ICE industry. However, the EV industry would be driven by distribution, reach, and scale in the future. As a result, investment focus would move from vehicles to deployment, and core technology development.

Insight EVDeepesh Rathore

It has not helped the ecosystem that almost all of these well-funded startups have been making large losses - Ola, Ather, and Livewire. Even Zero Motorcycles, whose financials are not in public domain, survives due to generous fundraising at the right time.

With everyone that was well-funded not making any money in the last five years, the investor ecosystem has become cautious with money moving to core tech and fleet deployment, instead of solely vehicle development for the retail market. This is a tough market, and money would favour startups that can create an edge in this environment.