Backing burgeoning EV Market in India: Why we invested in Kazam

The electric vehicle (EV) market in India has been growing rapidly over the past couple of years, led by multiple structural tailwinds. Total EV sales have grown by 4X in the last 2 years (from 0.4 million units in 2021 to 1.5 million units in 2023, see Figure 1). A large part of the sales is still dominated by two-wheelers (2Ws) and three-wheelers (3Ws), with larger vehicle segments like buses and cars catching up on the trend as well.

This increasing adoption, which initially started off with incentives from the government to push towards net-zero emission targets, is being further fuelled by a clear shift in consumer preferences towards EV mobility. Consumers and businesses have clearly understood the economic benefits of EV ownership and are jumping on the bandwagon. The government has also continued with its various incentives to enable faster adoption (e.g., FAME II, which provides subsidies of up to 20–30% of the vehicle price for 2Ws and 3Ws). We believe this momentum will continue going forward, driven by the government’s ambitious plans of achieving “EV30@2030”: 80% of 2Ws and 3Ws, 30% of private cars, and 40% of buses to be electric by 2030.

Figure 1: EV sales trend in India (Source: Vahan data)

Growth Driving a Rapidly Evolving Ecosystem

Given the rapidly evolving EV landscape, we have seen players emerge across the value chain (see Figure 2). Most of the venture capital investment in the EV space has gone into original equipment manufacturers (OEMs). Between 2016 and 2023, the Indian EV sector received US$ 2.6 billion in funding, with 90% of that directed toward OEMs. Both incumbents like TVS, Hero, and Bajaj, as well as new players like Ola and Ather, are scaling rapidly and generating value. The recent Ola Electric IPO and the response it generated is a further testament to the opportunity available in the EV ecosystem.

With clear winners emerging in the OEM segment, we continue to see new business models getting funded in other parts of the value chain that are critical to support the ecosystem as a whole.

Figure 2: Current EV landscape in India

Charging Infrastructure: A Complex but Critical Problem to Solve

The importance of robust public charging infrastructure can be evidenced by World Bank research indicating that investing in charging infrastructure is 4–7 times more effective in promoting EV adoption than providing EV purchase subsidies. China (16% EV adoption) and Norway (70% EV adoption) are prime examples of this. The Indian government has also acknowledged this and provided incentives in terms of financial stimulus (subsidies and tax breaks) to make public infrastructure viable. Some of the measures include a reduction in GST from 18% to 5% on EV chargers, tariff reductions on electricity, and a capital subsidy of 25% on charging equipment.

Range anxiety, driven by a lack of public charging infrastructure, is a key barrier to even faster EV adoption (especially for larger vehicles). India has an extremely low penetration today, with a ratio of EVs to public chargers being 135:1, compared to a global ratio of 5–20:1 in mature ecosystems such as the US and China (see Figure 3).

Figure 3: Ratios of EVs to public chargers in various countries (Source- Alvarez and Marsal

To solve for range anxiety, multiple stakeholders are attempting to build an extensive charging infrastructure. Leading OEMs such as TVS, Ather, and Hero Group have committed significant investments (over US$ 500 million) to set up charging infrastructure and drive EV penetration.

Multiple delivery fleets have also committed to meeting zero-emission goals by shifting to EVs over the next 5 to 10 years. Notable announcements include: Flipkart: 100% electric by 2030, Zomato: 100% deliveries through EVs by 2030, Gati: 100% fleet on EVs by 2026, BigBasket: 90% EV by 2025

Even existing real estate owners are looking to generate additional revenue and join the bandwagon. Notable among them are oil marketing companies, mall owners, and residential and office building owners.

All these players will require a reliable end-to-end charging solution, a need that Kazam is trying to address. Kazam is focused on building a full-stack charging platform for charge point operators (CPOs), OEMs, and fleet operators. Kazam provides a comprehensive solution with in-house designed and patented chargers (both AC and DC, see Figure 4), a charging management system (CMS) (see Figure 5), and a system that orchestrates payment workflow and reconciliation support (see Figure 6).

Figure 4: Kazam’s charging hardware solution for slow and fast chargers

Figure 5: Kazam’s charging management system

Figure 6: Customer app for discovery, payment and support

Kazam has already been adopted by leading OEMs and fleet operators who are using their services to expand their EV charging network.

Charging or Battery Swapping: Will There Only Be One Winner?

There is an ongoing debate on whether charging or swapping will dominate as the primary mode of charging infrastructure in India going forward. Both technologies have their own set of challenges to contend with: charging (capex, time, etc.) and swapping (standardisation across supply chains).

While there is no clear answer, history can provide some clues! One of the early adopters of EVs in India were fleet operators who required faster vehicle turnaround to reduce downtime. Given that charging technology was still in its nascent stages back then, with only slow charging options available, swapping gained prominence.

With the introduction of fast charging options, the dominance of battery swapping has started to be challenged (see Figure 7), with its contribution declining from 88% in 2020 to 37% in 2024.

Figure 7: Category of new vehicles sold in a particular year (swapping represents vehicles sold with removable battery)

Does this mean swapping will cease to exist a few years from now? Not necessarily. We believe both models will continue to coexist, with charging being the dominant model and swapping present in niche use cases (such as quick commerce in the 2W segment in urban dense areas).

In light of this, Kazam has also built a battery swapping management system (BMS) to become a single-stop solution for all OEMs, CPOs, and fleet operators to manage their charging infrastructure.

Kazam’s full-stack charging platform is addressing the significant gap in charging infrastructure that exists in India today. We have seen a similar gap in other emerging markets like Southeast Asia (SEA) and the Middle East (ME), which are experiencing strong tailwinds in EV adoption.

Today, Kazam has partnered with marquee customers in India across all segments (EV OEMs, fleet operators, CPOs) and has already started expanding into SEA and ME with the help of anchor customers. This foundation provides Kazam with a solid platform for global expansion. Given our strong network in Southeast Asia and India, we hope to help Kazam become a global charging infrastructure player. With Akshay, Vaibhav, and Paras leveraging their deep expertise in the EV segment and their experience in building tech businesses across hardware and software industries alike, we’re excited to support them on this journey!

We at Vertex Ventures Southeast Asia and India are excited about the evolution of the EV landscape in India. Do drop a note to himanshu.jain@vertexventures.com if you’re building in this space in India and SEA!