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 geographies or with the potential to do so. 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:
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.
(Today) Where is the E2W Tesla?
(3rd July) Where is the edge in a commoditized world?
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 As this (quite outdated) graphic chart from Marcus Lu from Visual Capitalist demonstrates, it leaves everyone behind by a huge gap in making money per car.
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.
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.
Tesla: The Marketcap Behemoth
Tesla’s success is well documented, and we would not spend too much time elaborating on it. At the close of trade yesterday (June 25th, 2025), Tesla’s market cap was slightly above USD 1.05tn. This is bigger than several of its competitors combined. However, this is not even the company’s prime, as Tesla has seen its market cap erode nearly 33 percent from its peak in Dec-2024.
The company sold a little less than 1.8 million units in 2024. It was a slight dip in deliveries from the previous year. It helps that all of these were what the market would call premium cars. The volumes may be much smaller than what companies like the VW Group and Toyota do, but Tesla maintains the highest margins for any high-volume carmaker.
What worked for Tesla was that it disrupted the pecking order before anyone could realise the disruption. Most of the industry—the Germans, Japanese, and all the premium manufacturers worldwide—were still in disbelief when Tesla leapfrogged past them in tech and valuations.
The business plan was simple and something that any electric car manufacturer had not thought of till then but have gleefully copied since. Knowing that an electric car would always be more expensive that a mass-manufactured ICE car and the price delta would be too high for customers to bite, Tesla went where the price elasticity was higher. When it entered the market, the Model S had the German luxury brands in its crosshairs, not a Chevrolet or Ford. Acceptance was high becaue the Germans were still learning the alphabet in software when Tesla had already started writing epics.
Vertical Integration: It Works for Tesla
Many petrolheads may find faults in Tesla and niggles in the quality, but the company has worked hard to create very strong returns for investors. One of the keys to its success has been the much-touted control and vertical integration, something we pondered about recently.
InsightEV – Global Electric Mobility
Automotive OEMs are content to be system integrators and module assemblers, and the most significant research and development is joint efforts with the Tier-1 supplier community. In contrast, Tesla wanted to control the development of every significant component and every step of the equation minutely.
The company has designed the car’s most important components: the motor, battery, and bodyshell. However, what is often overlooked is that Tesla also designed its superchargers, important components like the Octovalve (heat pump), all the software, the UX/UI, the ADAS (autopilot/FSD), the FSD chips, and even the seats. Then, it also designs the manufacturing process and many of the jigs and fixtures.
That makes Tesla a solid engineering company and creates a platform of work from which to leapfrog beyond others. The innovation platform has ensured that Tesla is nimbler and a few miles ahead of everyone in the industry when bringing new tech to the market.
Comparing that to the present E2W industry, it is difficult to find any parallels. Tesla’s success was driven by being ahead of the curve and, most importantly, the competition. That is hard to replicate in the E2W industry, where commoditization is a challenge even before the industry takes off.
Commoditization Erodes Everyone’s Edge and Limits Reach
We call commoditization as a phenomenon where the industry starts producing highly predictible and similar products so much so that it becomes increasingly difficult for buyers to choose between them. Under such a scenario, motorcycles and scooters are reduced to the level of staples.
Electric mobility in the two-wheeler space, through its sheer simplicity, allows you to do that. In the case of two-wheelers, the product attributes become supply chain-driven. He who has the most efficient supply chain wins the battle. The customer is increasingly not fussy about the brand but still expects an acceptable level of product quality and life.
The Parallels with Consumer Electronics / White Goods and Potatoes
On the surface, there are so many parallels between the Consumer Electronics/White Goods industries and E2Ws. All these industries are driven by the efficiency of their supply chains and are fairly commoditized. Take televisions, for example – flat panels are a commodity that is fabricated in China, Taiwan, or South Korea, with almost 100% of the world’s manufacturing being located in these geographies. Every television manufacturer sources panels from relatively obscure names like Visionox, TCL, Innolux, Tianma, AUO, etc. The Koreans are a bit different, and both LG and Samsung source most of their displays from their own display manufacturing companies.
Like most supply chains nowadays, the end user, the customer, does not know who the display supplier is inside their television. All they know is to trust brands that stand for a fair level of quality and would provide after-sales service, hopefully never needed.
Brand loyalty is there, but not so high that it would be a critical decision-making factor. It is very rare that customers visit a showroom to buy a television from a certain brand. Mostly, they are out to discover and open to being influenced.
Importantly, there is no cutting-edge tech – flat panels, zero-bevel displays, curved panels – that comes out and can dominate the market for a long time before the rest of the industry has similar products, the supply chain driving the industry.
The other thing that drives sales is distribution. From Honda, to LG and Samsung, Apple, and Coke/Pepsi, products sell because they are available. No one is born rabidly loyal to a flat-panel television from Samsung. They buy it because it is there, available in the next-door mall.
It is the same with E2Ws as well. You can create a fairly standardised electric scooter using existing supply chains, designing little more than the A-surfaces in-house. What would drive customer acceptance would be an acceptable standardised quality, the right prices, and the fact that it is there.
Just like potatoes.
Global Reach Helps
Apart from the technological edge, what works for Tesla is its global reach. Obviously, this is the Western definition of the globe, and Tesla’s distribution is nowhere close to what a Toyota manages.
Data suggests that Tesla has a presence in 35 countries. This may sound small, considering there are 195 countries in the world. However, Tesla covers China, the USA, Australia, and Europe, covering most of the significant car-buying world. In fact, apart from India, there are not many significant markets left for Tesla to enter.
Compare that to electric two-wheelers, and the situation is quite different. None of the prominent and most funded startups – Ather, Ola, Zero, Gogoro – went too far with going global. They all had different reasons:
Ola and Ather
The Indian startups rank very high in raising private investments, and both have recently gone public. They sell a sizeable number of scooters every month – around 15,000 each, depending on the month you check the data. However, the Indian market is huge – about 500,000 scooters every month or 1.6 million two-wheelers every month, when adding the motorcycles. There is not only enough meat on the local bone, but there is so much that startups have not gone beyond nibbling the skin.
So both the brands decided that international markets can wait. Any international expansion is a distraction that fast-growing startups can do without. It requires teams, homologation in respective markets It is also understandable that most large international markets have their own ‘issues’ that make the entry of any outsider difficult. For instance:
China: Very big but dominated by local players. An international entrant can’t realistically take on the Chinese in E2Ws.
India (for outsiders): The world’s biggest two-wheeler market that rewards low-cost, high-quality products. One needs deep pockets, else the biggest brands can get into trouble. Just look at Gogoro in India.
ASEAN: A large volume market dominated by Honda+Yamaha turning electric slowly. The Japanese have an edge that is difficult to surpass.
North America: A lifestyle market that has not accepted electric motorcycles in a big way.
LatAm: A market slowly turning green but too slowly for the big boys to get serious.
Europe: A nice market, but too fragmented. Homologation is time-consuming, and most of Europe wakes up as a market only in the summer months. Again, a startup has to weigh in on putting a high-cost local team or a high-commission distributor vs focusing on the core market.
Zero Motorcycles and Livewire
For very well-funded lifestyle motorcycle manufacturers, it is often an easy choice to enter as many markets as possible. The key question is: are the buyers there? In both cases, it would be difficult to find buyers in large-volume markets like India, ASEAN, or Africa.
Gogoro
The intent is there, and Gogoro has entered several significant markets – India, Indonesia, China, Colombia, and many more. However, any swapping network is capital-intensive, while acceptance is never instantaneous. A cash-strapped Gogoro has to be careful about its cash deployment.
Making Money is difficult
Electric two-wheeled mobility is a struggling baby, and all new entrants, however rich they may be from private investments, are struggling to make money from their operations. In this situation, it is prudent to put your head down and focus on regular business rather than make plans for market entry somewhere 12,000 km away.
The Non-Participation of the Global Majors
Global reach has never been a challenge for the incumbent ICE two-wheeler manufacturers. Honda in motorcycles has more reach and access to global markets than any other automobile manufacturer. Ditto Yamaha. Or, Bajaj Auto and TVS Motor.
However, global two-wheeler manufacturers have shown little interest in going electric; most are still biding their time, hoping for the demon to go away. The onus then is on the start-ups, and not many have immediate global ambitions.
As things start changing and every global ICE major now has an electric plan, however early-stage it may be, they would also push their electric products far and wide. We would then start seeing the emergence of true global electric two-wheeler manufacturers.
Till then, the most significant player remains China-based Yadea, the world’s largest Electric two-wheeler manufacturer.
