EV Market Grows Quickly, But Some Start-ups Struggle To Survive With efforts by industry and government on ground to meet the target of 30 per cent share of EVs in new sales by 2030, this ambition seems to be falling off the chart for Tork Motors.

Electric Vehicles (EVs) have immerged as one of the fastest growing segment in the automobile sector, with 6.8 per cent penetration in 2024 against 5.3 per cent in FY23 in the country. This ever changing sector has been provided with various supports in terms of government subsidies and policies to reduce the carbon emission and align with Paris Agreement.

On March 13, 2024, the Ministry of Heavy Industries announced the Electric Mobility Promotion Scheme 2024 with a total outlay of INR 500 crore to support adoption of e-2Ws and e-3Ws for a period of four months from April 1, 2024 to July 31, 2024.

With efforts by industry and government on ground to meet the target of 30 per cent share of EVs in new sales by 2030, this ambition seems to be falling off the chart for Tork Motors. The company which came up with India's first electric motorcycle in 2022 is now struggling to survive in the market as company has stopped its production and Pune facility has been on standstill since December.

The company is on the possible verge of shutting down its operations as it has also terminated all its employees. Bharat Forge, the biggest shareholder in Tork Motors has also written off its investment.

There is no doubt that the EV market presents a unique set of opportunities for entrepreneurs. However, with opportunities come challenges. Navigating this dynamic industry requires more than just a passion for innovation.

Kunal Mundra, Founder & CEO, Electrifi Mobility said that an entrepreneur should keep incubating new ideas to grow the business.

"Once you're a successful start-up that has a proven idea executed at scale, there are a few priorities that are worth keeping in mind. Firstly it's absolutely critical that you move quickly to cash profitability and build the required operating discipline to make that happen. Secondly you have to keep testing and incubating new idea so that there is always enough fuel for growth. Lastly I think building a strong leadership team is vital for scalability. If any of these don't happen, a successful start-up can suddenly find themselves under severe stress," Mundra said.

We have witnessed many cases in which successful start-ups suddenly shut down their businesses or run into severe crisis which are beyond management; for instance Tork Motors; but what are the factors that cause this situation for the start-ups?

According to Appalla Saikiran, Founder & CEO, SCOPE, a unified platform for investors and entrepreneurs, the key factors that often cause start-up shutdowns are a lack of market demand, poor cash flow management, and misaligned team dynamics.

Ashutosh Kumar, CEO, GrowthJockey said that start-up failures often stem from both controllable and uncontrollable factors. External changes, like technological and regulatory disruptions, can impact even well-run start-ups.

"In large corporate ventures, agility and leanness are often compromised, and the gap between employee and founder mindsets, combined with legacy systems, can lead to a focus on cosmetic KPIs and luxury benchmarking—ultimately causing ventures to fail. This is where venture architects, who bring founder and start-up DNA, are essential. To mitigate risks, it's crucial to choose the right problem, simulate the 0-1 and 1-100 journeys, and evaluate both upside and downside risks. By staying lean, focusing on core problems, and planning infrastructure meticulously, ventures can navigate challenges and increase their chances of long-term success," he added.

The sector demands a comprehensive understanding of various critical factors. From technological advancements and market trends to regulatory landscapes and supply chain management, each element plays a pivotal role in shaping the success of an EV venture. In this evolving landscape, an entrepreneur must strategically balance these factors to not only enter the market but to thrive in it.

Dr. Kiran Kumar Ravulakollu, Dean School of Technology, Woxsen University said that new entrepreneurs must be armed with a deep understanding of EV challenges faced at conceptual, technological, and commercial levels. Success hinges on technological innovation, sustainable practices, and a deep understanding of government policies.

"The future of electric vehicles is bright, but it requires a diverse ecosystem of players. India, with its vast potential, should foster a supportive environment for local entrepreneurs. By staying ahead of industry trends, young EV entrepreneurs can contribute to a cleaner future while achieving business success," he added.

"As the EV industry matures, entrepreneurs must navigate a dynamic market by focusing on innovation, infrastructure, and customer-centricity. Ensuring that your technology is not only state-of-the-art but also adaptable to future advancements will give you a competitive edge," Dr. Ganesh Kakandikar, Professor in Mechanical Engineering and Associate Dean: External Relations, MIT-WPU said.

Meanwhile, Nikhil Aggarwal, Founder & Group CEO, Grip Invest said that building a company is a marathon and not a 100 m sprint. There is also no one single formula for success. Hence it is important to know how to pace yourself, when to accelerate and when to recalibrate.

"At the same time you are not building in perfect conditions but at the mercy of competition, regulation, funding environment and more. Most viable business models fail just simply because they couldn't sustain during periods of stress. Keeping a close eye on the most critical resources for survival - cash and key employees will ensure founders can create multiple chances for success of their start-ups," he added.