This one-year old startup is accelerating EV adoption by retrofitting passenger mobility ICE vehicles

The transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs) has been rapidly accelerating, but this shift has led to significant environmental and urban planning challenges. 

A major concern highlighted in recent reports is the emergence of large junkyards filled with discarded EVs, particularly in countries like China. 

The issue arises from the rapid obsolescence and abandonment of EVs, especially in the EV ride-hailing industry. While EVs are a more environmentally friendly alternative to ICE vehicles, the problem of discarded vehicles contributes to waste and pollution, negating some of the environmental benefits of electric transportation. 

Furthermore, even when ICE vehicles are not discarded but repurposed or continue to be used, they contribute to road congestion, becoming just another vehicle on already crowded streets. 

For EVs to be a truly sustainable solution, they need to be integrated into a circular ecosystem that addresses issues of waste, congestion, and the lifecycle management of vehicles. The challenge lies in finding a way to promote the adoption of EVs while also ensuring that the transition is sustainable in the long term, both environmentally and in terms of urban infrastructure. 

This requires innovative solutions that go beyond simply replacing ICE vehicles with EVs and instead look at ways to repurpose, retrofit, or recycle existing vehicles to reduce waste and congestion.

This is where Evate comes into play. The founders realised that by retrofitting passenger mobility ICE vehicles, especially auto-rickshaws, with EV components to transform them into electric autos, they could promote the wider use of electric vehicles. It also reduces the need for new vehicles on the roads.

Who are the founders?

Evate was founded in 2023 by Vijay Madhusudan and Amit Shahani with the aim of accelerating the global transition to electric vehicles (EVs) by making them more accessible to a larger number of people.

Amit Shahani, an IIT Madras graduate, is the co-founder of Evate. Before establishing Evate, Shahani held various senior leadership roles, including Director of Operations at Hitachi Payment Services and Well Intervention Manager at Schlumberger. In the latter position, he led the business unit for Well Intervention across 36 countries in the Sub-Saharan region.

Vijay H. Madhusudan, another IIT Madras graduate, is the co-founder of Evate. Evate wasn’t Vijay’s first venture; he also founded Enfrien Technologies, a bootstrapped engineering solutions company dedicated to sustainable and environmentally friendly technologies.

Additionally, he co-founded UnboxMyHouse, Naavi Solar, and i-byk. Vijay has held senior leadership positions in various companies, serving as the India Director at Gain Solar, a project coordinator at Fichtner, and worked at Global Analytics.’

Accelerating adoption of EVs

Evate focuses on promoting the adoption of electric vehicles (EVs) by retrofitting existing internal combustion engine (ICE) vehicles, particularly auto-rickshaws, with electric components. 

This approach not only encourages the wider use of EVs but also helps reduce the number of additional vehicles on the road, contributing to a more sustainable and less congested urban environment. 

The startup offers a comprehensive retrofitting experience through its mobile app, which is currently in beta testing. The app serves as a platform for drivers who wish to convert their vehicles to electric. 

It connects them with essential services such as identifying retrofitting specialists and accessing financial assistance, including loans. Evate's app guides users through the entire retrofitting process, providing detailed information on procedures and financial aspects. 

The startup has formed partnerships with large auto driver associations and Original Equipment Manufacturers (OEMs) involved in retrofitting. Additionally, Evate offers financial products tailored to make retrofitting costs manageable, including customised loans and insurance options. 

What is Retrofitting?

Retrofitting in the context of EVs involves converting existing petrol or diesel vehicles into electric vehicles, including replacing the original engine and other components with an electric motor, high-voltage battery, and other necessary parts.

Instead of buying a brand-new electric vehicle, which can be expensive for some people, retrofitting allows vehicle owners to upgrade their existing vehicles with electric components. Notably, this process is generally more affordable, with costs ranging from Rs 1.5 lakh to Rs 2.5 lakh.

How Indian government is supporting Retrofitting?

Recognizing the benefits of retrofitting, many state governments in India have developed specific policies and guidelines to regulate and standardize this process, ensuring it is done safely and efficiently.

For example, in 2021, the Delhi government decided that diesel vehicles over 10 years old, which would normally be required to be scrapped, could continue to be used if they were converted to electric using an EV kit.

To support this initiative, the government established authorized retrofitment centres (RFCs). These centres ensure that the retrofitting process adheres to the government's safety and quality standards. This approach helps in promoting the use of electric vehicles while also addressing environmental concerns associated with older diesel vehicles.

How does it differ from other startups?

The startup's unique selling point is its ability to technically underwrite emerging technologies, offering loans for products that are not typically supported by banks and Non-Banking Financial Companies (NBFCs) due to the perceived risks. 

Evate also provides ancillary services such as assistance with vehicle re-registration, tracking, and maintenance.

How does Evate make money?

While the startup has an innovative approach, It primarily makes money from the loan products it offers on its platform, earning margins on interest rates and processing fees. 

Evate also generates revenue from margins on EV kit sales and plans to explore additional revenue streams from other services and products like insurance and vehicle accessories. 

The startup aims to disburse 10,000 loans by the end of 2024, targeting $18.75 million in assets under management (AUM).

So far, It has raised Rs 35 lakh in a pre-seed funding round from IIT-Madras alumni and is looking to raise $3 million in the upcoming funding round to power its growth.

Industry growth

In a broader context, the Electric Vehicle Powertrain Market is estimated to be $188.19 billion in 2024 and is expected to grow to $425.10 billion by 2029, with a CAGR of 17.70% during this period, as per Mordor Intelligence report. 

The projected growth comes on the back of the increasing sales of electric and hybrid vehicles worldwide.

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