Private Capital Powers India’s Clean Energy Revolution

If someone asked you to pinpoint the exact moment when sustainability went from being a feel-good aspect, to a strategic imperative, you’d be hard-pressed for an answer. India’s shift to green mobility kicked into gear when startups electrified rural India’s favourite two-wheeler – the humble scooter, revved up when e-commerce operators began electrifying their delivery fleets, and is today awaiting an inflection point for electric four-wheelers, as legacy players bet on hybrids and foreign players like Tesla consider setting up shop in India.

Today, original equipment manufacturers (OEMs) manufacturing electric vehicles are eligible for state incentives that subsidise their cost of production. Meanwhile, policymakers are hardwired into thinking green when it comes to public transport. When did this shift in thinking come about? Perhaps the better question is how, and that answer lies in following the trail of private capital. Long before policy caught up, private equity and venture investors were backing a green future when most still saw just a scooter running on an electric motor.

That early capital did more than fund prototypes—it sparked an entire supply chain rethink. Charging infrastructure, localised manufacturing, battery R&D, and leasing models all gained momentum because someone was willing to underwrite the unknown. In India, this kind of catalytic risk-taking didn’t just enable innovation, it legitimised it.

This was about backing new use-cases, supporting early technology, and underwriting uncertain market behavior. Private capital played the role of both believer and builder. Electric two-wheelers have steadily moved into the mainstream, with startups like Ola Electric and Ather leading the charge. In the commercial three-wheeler space, electrification is gaining ground rapidly, driven by cost efficiencies and strong policy tailwinds.

Consider Yulu, a startup that pioneered the concept of electric bike rentals for last-mile mobility in India, until it found a business-to-business use-case in gig workers delivering food and groceries for Zomato, Swiggy, Blinkit, Zepto, et al. Today, gig workers account for 90% of Yulu’s revenue. Besides Yulu, Bounce and Zypp Electric are also active in the segment called mobility-as-a-service, helping e-commerce companies with their sustainability missions.

This business model evolution, from app-based rentals to fleet solutions, underscores a broader theme in India’s clean mobility journey: that of rapid iteration and real-world grounding. These weren’t vanity projects chasing a green badge. These were commercially viable, operationally embedded shifts.

If Zomato is to achieve its objective of achieving 100% EV-based deliveries by 2030 and achieving net-zero emissions across its food delivery value chain by 2033, electric vehicle startups will have a huge part to play in that mission. Private capital sensed the moment here, identified the synergies, and most of all, trusted the founders when they were told of a new use-case emerging. The pivot from B2C (business-to-consumer) to B2B for many of these startups could have seemed like an endless trek, had private capital not turned into ‘patient’ capital.

The phrase “patient capital” is often thrown around in impact investing circles, but in India’s EV landscape, it’s literal. Investors had to absorb uncertain policy cycles, infrastructure bottlenecks, and evolving consumer behavior, all the while supporting startups through pricing pressures and hardware transitions.

In this way, the private capital that supported India’s EV ecosystem was elastic. Able to adapt across business model shifts, hardware pivots, and regulatory waves, it stuck around through the valley of disillusionment and waited for inflection. That flexibility is what distinguished believers from speculators.

Today, the first batch of Indian EV startups have IPOed, a milestone made possible by investors who backed the green transition when it was still a risky bet. In 2022, Indian EV startups achieved a record $1.66 billion in funding, reflecting a 117% increase compared to the previous year. Notably, over 62% of this funding was directed towards late-stage startups, indicating a maturing ecosystem.

This maturing isn’t just visible in funding rounds, it’s visible in factory floors, policy frameworks, and end-customer behavior. Cities like Bengaluru, Hyderabad, and Pune are becoming electric-first in categories like fleet logistics and shared mobility. Infrastructure players, battery-swapping networks, and even leasing providers are now integrated into the ecosystem.

As green mobility becomes a policy priority – the Indian government targets a 30% share of EVs in new vehicle sales by 2030 – it’s worth remembering that private capital got there first, backing founders long before the tailwinds kicked in.

India’s clean energy story is now about scaled solutions. And much of that scale has been made possible by the early conviction of private investors who believed that green mobility wasn’t just good economics, but a good strategy.

Now, as India expands this vision to include EV battery manufacturing, hydrogen-based transport, and green logistics corridors, the role of private capital is evolving again, from catalyst to consolidator. The capital that once seeded ideas is now backing platforms, roll-ups, and late-stage expansion.

The next wave may not just be about electrifying transport, but about decarbonising the full value chain, from manufacturing inputs to last-mile delivery. That means new opportunities in clean energy storage, AI-powered fleet management, carbon accounting, and circular economy logistics.

For investors who backed the first wave of clean mobility in India, this is an inflection point. For those yet to enter, it may be the most asymmetric window of opportunity we’ve seen in this space in a while.

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