Bajaj Auto invests $8 million in e-bicycle sharing platform Yulu4 min read . Updated: 27 Nov 2019, 05:59 AM IST
- This comes in the backdrop of India’s changing mobility landscape
- The urban mobility startup has been gaining traction from traditional tech venture capitalists and venture debt investors
New Delhi: Bajaj Auto Ltd, India’s second largest motorcycle manufacturer, will invest in Bengaluru-based cycle sharing platform Yulu, which offers electric cycles and bicycles on hire for last-mile commute.
This comes in the backdrop of India’s changing mobility landscape. The interest from Rajiv Bajaj-helmed Bajaj Auto in a ride hailing firm also comes at a time of cab-hailing giant Uber’s interest in the space.
“Bajaj Auto Ltd is investing $8 million in Yulu, to compliment this strategic relationship. Yulu will source from Bajaj electric two-wheelers which have been co-designed and manufactured exclusively for shared micro-mobility. Bajaj will also consider facilitating the vehicle finance needs of Yulu for a large scale deployment of its micro-mobility electric vehicles," the companies said in a joint statement.
The urban mobility startup, co-founded by ex-InMobi founder Amit Gupta and entrepreneur R.K. Misra, has been gaining traction from traditional tech venture capitalists and venture debt investors. The service was launched in Bengaluru and has since expanded to Mumbai, Pune, Bhubaneswar and Delhi.
“At BAL (Bajaj Auto Ltd), we believe that the two factors of congestion reduction and pollution control will drive the segment of shared micro-mobility in the future. That coupled with the expansion of Mass Rapid Transport System like Metro in large cities will further boost the demand for flexible last-mile connectivity. In Yulu we find an experienced and committed partner with robust achievement of success metrics in a very short time. And this is why we decided to partner with them in their journey of bringing Yulu service to every neighborhood of Urban India," said Rajiv Bajaj, managing director Bajaj Auto in the statement.
In response to Mint’s queries on Friday, an external spokesperson for Bajaj Auto Ltd in an emailed response said, “Have asked the concerned team, waiting for their response."
Yulu’ investors include Blume Ventures, Japan’s Akatsuki Entertainment Technology Fund, 3One4 Capital, as well as from individual investors such as Anand Chandrasekaran, Binny Bansal, InMobi co-founder Naveen Tewari, Freshworks co-founder Gireesh Mathrubootham and SlideShare founder Amit Ranjan. In May, Uber announced a pilot with electric scooter sharing platform Yulu in Bengaluru.
“Yulu plans to increase its fleet size to 100,000 electric two-wheelers by Dec 2020 with an extensive network of its battery-swapping stations across the cities where it operates," the statement added
There has been growing traction in the space. Mint reported on 22 November about cab-hailing giant Uber beginning talks with bike rental startup Bounce to list its two-wheelers on the Uber India app.
Amit Gupta, co-founder and CEO, Yulu, said in the statement, “Bajaj Auto Ltd is the leading automaker of India and is respected globally for it’s quality and manufacturing capabilities at scale. Yulu is the leading electric micro-mobility service provider that requires reliable, durable and comfortable electric vehicles to serve its customers, hence a committed manufacturing partner is crucial to our success."
After protesting along with TVS Motor Co. Ltd chairman Venu Srinivasan against the National Democratic Alliance (NDA) government’s plans to convert a part of its internal combustion engine (ICE)-driven two-wheelers and all three-wheelers into electric, Bajaj Auto Ltd last month announced its second innings in the scooter segment, almost after a decade’s gap, with the launch of its electric scooter — Chetak.
Federal policy think tank NITI Aayog, which is spearheading the government’s EV initiatives, and the ministry of road transport and highways, among others, was earlier considering a policy proposal to ban all ICE-driven two-wheelers under 150cc by 2025, and three-wheelers by 2023. Nearly 80% of all vehicles sold in India are two- and three-wheelers.
India, the world’s third-largest oil importer, has taken several steps in the past few months in its push to combat widespread pollution in its major cities. The government also aims to trim its hefty fuel import bill through the shift to electric vehicles.
The Narendra Modi government is making an aggressive push for a cleaner and cost-effective mode of transport. As part of the strategy, India is putting the final shape on a plan to build at least four Tesla-style giga factories to manufacture batteries with an investment of around $4 billion, as reported by Mint on 25 July. In March, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles or FAME 2 scheme—to expand commercial vehicle fleet—was also announced with an outlay of ₹10,000 crore.
The government has been trying to incentivize the adoption of EVs through several steps in the past few months, similar to those taken by governments in China and Europe. The Goods and Services Tax Council headed by finance minister Nirmala Sithraman reduced tax on EVs and chargers to 5% from 12% and 18%, respectively. India also announced customs duty exemption on lithium-ion cells, which will help lower the cost of lithium-ion batteries in India, as they are not produced locally.
As part of the strategy to encourage private sector investment in the strategically important sector, the government is also looking at a raft of tax incentives for manufacturers and a suitable basic customs duty safeguard from 2021-2030 for making advanced chemistry cells and battery in India.