EVs lose the funding race as investors drive hard bargain
electric vehicle (EV) sector has nearly halved between 2022 and 2024 as policy changes and a decline in sales growth prompt investors to push for better unit economics and profitability at companies before committing further capital. According to data from Venture Intelligence, funding in the overall EV industry dropped to $586 million in 2024 from $808 million last year, while the number of deals closed stood at 44, similar to a year ago.
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EV startups had racked up $934 million in 2022 on the back of investor bullishness, fuelled by government incentives for the sector. The PM-E Drive Scheme, implemented in October, aims to gradually reduce the industry’s reliance on subsidies, replacing the FAME-II programme.
Under the new scheme, subsidies for electric two-wheelers are based on battery power, with a fixed rate of Rs 5,000 per kilowatt hour (kWh) in the first year, capped at Rs 10,000.
OEMs Impacted
By comparison, the FAME-II scheme offered peak incentives of Rs 15,000 per kWh, covering up to 40% of a vehicle’s cost. FAME stands for Faster Adoption & Manufacturing of Electric Vehicles. However, in 2023, this was revised to Rs 10,000 per kWh, with the incentive cap reduced to 15% of the vehicle’s ex-factory price.
The PM-E Drive Scheme excludes subsidies for electric
