TVS Motor has purchased the stake in Ultraviolette for a little over Rs5 crore
Mumbai: Two-wheeler maker TVS Motor Co. Ltd Thursday said it has bought a 14.78% stake in Ultraviolette Automotive Pvt. Ltd, a Bengaluru-based startup working on electric two-wheelers and energy infrastructure.
The transaction was valued at a little over Rs5 crore, TVS said in a stock exchange filing on Thursday.
According to the exchange filing, the startup had Rs3.21 lakh revenue in 2016-17. The company, which has tested three prototypes, has not launched an electric two-wheeler yet.
Bengaluru-based Ultraviolette was founded in December 2015 by Niraj Rajmohan and Narayan Subramaniam, alumni of the BMS College of Engineering, Bengaluru.
TVS is the second two-wheeler manufacturer after Hero MotoCorp Ltd to acquire a stake in an EV technology startup. Hero invested Rs205 crore in EV startup Ather Energy Pvt. Ltd in October 2016. Bengaluru-based Ather unveiled its first electric two-wheeler Ather S340 in February, which is set to go into production soon in 2018.
Analysts say such niche investments are necessary to increase the adoption of electric two-wheelers owing to the expertise startups provide, and expect that such investments will continue.
“In the past, most traditional automakers except Hero and Tata Motors have neither invested in building an EV manufacturing ecosystem nor in any fundamental research. Therefore, companies need to acquire expertise to meet the government’s 2030 (all-EV) goal," said an analyst with a leading brokerage on condition of anonymity.
Charging infrastructure and a difference in riding experience will hold back consumer demand for electric two-wheelers, he added.
Meanwhile, TVS is developing an electric scooter code-named U218 as other two-wheeler makers such as Bajaj Auto Ltd, Honda Motorcycle and Scooter India Pvt. Ltd, Mahindra 2 Wheelers Ltd and India Yamaha Motor Pvt. Ltd are all set to launch electric two-wheelers in 2018, according to a report in The Economic Times.
TVS and Ultraviolette declined to comment for this story.