Al-Futtaim leads $15m investment in Indian electric vehicle start-up

Visitors inspect an exhibition stall during an electric vehicle expo in Bengaluru, India. Photo: EPA

Al-Futtaim Automotive, one of the UAE’s main vehicle distributors, has led a $15 million investment in River, an Indian electric two-wheeler start-up.

The funding will bolster River’s manufacturing and distribution networks for an August delivery start in India, the Al-Futtaim Group subsidiary said on Friday.

“We evaluated over 50 electric two-wheeler start-ups and are impressed by the team’s vision and relentless commitment to in-house product development,” said Paul Willis, president of Al-Futtaim Automotive.

“I am confident that their products will see great success, in India and internationally.”

The adoption of electric vehicles in India is mainly led by two-wheelers, as the high cost of electric cars makes them unaffordable for most consumers.

The Indian two-wheeler vehicle market, the biggest in the world, is expected to grow to $26.64 billion in 2028, from $16.01 billion in 2022, according to ResearchAndMarkets.com.

Last year, Hero MotoCorp, the world’s largest manufacturer of motorcycles and scooters, launched its first electric vehicle as part of its plan to move towards clean energy.

River’s first electric scooter, the Indie, has covered more than 100,000km in testing, said the company's co-founder and chief executive Aravind Mani.

“At River, we've been quietly working in the background for the last two years … now we’ve set the base to build a billion-dollar business,” Mr Mani said.

India is aiming for 30 per cent of private car sales and 80 per cent of two-wheelers to be electric by 2030, in an attempt to reduce carbon emissions and its dependence on consumption of costly crude oil imports.

As India scales up its EV manufacturing to meet these goals, demand for lithium-ion battery cells used in EVs is rising.

The South Asian country's lithium-ion battery demand stood at three gigawatt-hours last year and is set to rise to 20 gigawatt-hours by 2026 and 70 gigawatt-hours by 2030, according to a report by consultancy Arthur D Little.

The Al-Futtaim Group is expanding its e-mobility sector, driven by the growing importance of green transport in the Emirates.

Last year, Al-Futtaim Automotive teamed up with Swedish premium electric car brand Polestar to launch sales of its electric vehicles in the UAE.

Global electric car sales are expected to surge by 35 per cent this year, helped by government subsidies and the tightening of carbon dioxide emissions standards, the International Energy Agency has said.

Electric car sales are set to increase to 14 million in 2023, from 10 million last year, according to the Paris-based agency.

This means the share of electric cars in the overall market will rise to 18 per cent this year, from 14 per cent in 2022, the IEA said.