GoKawiilWhile battery swapping has struggled to take off in much of the world, Canadian auto parts giant Magna International believes the model could work at scale in India, where millions of two- and three-wheelers and a fast-growing delivery economy create a different set of economics.
And it’s placing that bet on Yuma Energy, a Bengaluru-based firm that operates a battery-swapping network for electric two- and three-wheelers. Yuma, which spun out of Indian mobility startup Yulu in early 2023, has completed more than 60 million swaps to date and now has about 100,000 batteries deployed across its network.
Magna is now investing another $35 million in Yuma, increasing the auto supplier’s stake from the 51% it took when the joint venture was formed, Yuma managing director Muthu Subramanian said in an interview. As a result, Yulu’s 49% stake will be diluted. Subramanian declined to disclose the new ownership split.
Yulu and Yuma are Magna’s only startup investments in India, the company confirmed to TechCrunch. In 2022, Magna committed a combined $77 million to the two businesses, with $25 million going to Yulu and $52 million to the battery-swapping joint venture.
Betting on India’s gig economy
Magna’s latest investment hinges in large part on India’s growing gig economy.
Delivery riders can lose valuable time, and revenue, while charging their EVs. Subramanian estimates that only about 10% to 15% of vehicles used by gig workers in India are electric today, leaving considerable room for operators such as Yuma if more of those riders switch from gasoline-powered vehicles.
“With Indian gig workers’ high runtime on a daily basis, an EV makes absolute sense in terms of cost of ownership,” Subramanian told TechCrunch. “Uptime is important.”
Yuma is targeting those high-mileage riders, arguing that swapping is more practical than fast charging. A battery, Subramanian said, can be exchanged in under two minutes, while even a 20- or 30-minute fast charge takes a rider off the road and requires more space and power to serve multiple vehicles at once.
However, building that convenience is expensive, as Yuma has to keep its batteries and swapping infrastructure ready before enough riders arrive to fully utilize them. “It’s a capital-intensive business, and the unit economics will play out at scale,” Subramanian said.
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