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?
Today, we kick off a three-part analysis series where we look at the lack of globalisation in the E2W world. There are important players in every significant geography, startups that have made a difference in their respective geos or with the potential to do that. There is Ather in India, SPIRO in Africa, Zero in the US, Stark in certain segments of the western world, and Vmoto is becoming ubiquitous with small fleet operators in many markets.
However, apart from the Chinese, no one can be called a global player. For long, even the Chinese were content with being global factories and suppliers to white labelers in the international markets. It is only recently that brands like Yadea and TailG have started exploring the world as a brand. Even then, it is not at the expense of their 'factory to the world' credentials.
Everyone else in various markets seems busy with their core geographies and happy to give other markets a miss. Is it by choice or a compulsion? Or is it simply the case that we are far too early in the maturity curve?
In the three-part analysis: 1. (Today) Where is the E2W Tesla? 2. (3rd July) Where is the edge in a commoditized world? 3. Yadea - A company profile. What makes it tick? How is Yadea changing from a factory to a brand?
We look at Tesla, and more than Musk’s personality, valuations, and closely watched controversies, the company stands for the infinite potential that electric mobility promises.
Yes, even after Musk took the DOGE axe on his foot.
Private money, and then public money, have rewarded Tesla to the point where it is the most valued automotive manufacturer by a margin. As this (quite outdated) graphic chart from Marcus Lu from Visual Capitalist demonstrates, it leaves everyone behind by a huge gap in making money per car.
The graphic from Visual Capitalist may be old, but the equations haven’t changed much, even after Tesla’s profitability came down significantly.
We track more than 220 startups globally in the electric two-wheeler industry. This may be a small number, considering that we don’t cover all of them, and many are always in stealth mode. We notice everyone has different ambitions, a diverse approach to technology, product plan, strategy, and access to funds.
But there is one common thread that binds all of them. Everyone has local ambitions. Apart from the Chinese, that is, and we will come to them later.
Most start-ups are very geographically constrained. There are no global unicorns that will disrupt electric two-wheeler mobility.
There is a slight dissonance when we compare E2Ws to E4Ws, and the Tesla comparison crops up. The question specifically is:
Is there a likely Tesla in the E2W industry?
We’re sure this is a question that all investors ask themselves.
Further in this analysis:
1. Tesla: The Marketcap Behemoth
2. Vertical Integration: It Works for Tesla
3. Commoditization Erodes Everyone's Edge and Limits Reach
4. Global Reach Helps A. Ola and Ather B. Zero Motorcycles and Livewire C. Gogoro 5. Making Money is Difficult
6. The Non-Participation of the Global Majors
It’s an important question because most private money investment philosophies are focused on finding the big winner. It’s just that when we start analyzing the 220-odd start-ups that we track, we struggle to find a worthy candidate.
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