DH Interview | 'Big firms get 13-15% advantage over startups due to auto PLI': CEO of Euler Motors Saurav Kumar

New Delhi:  The Indian automobile sector has long been dominated by legacy manufacturers like Maruti Suzuki, Tata Motors, Mahindra & Mahindra and Hyundai.

However, the electric vehicle (EV) space has opened the door to a new generation of startups challenging traditional industry structures through innovation, technology, and new mobility models.

New Delhi-based Euler Motors has emerged as one of the leading players in electric three-wheeler and four-wheeler cargo segments. 

Saurav Kumar, Founder and CEO of Euler Motors, says startups would play an increasingly important role in deepening EV penetration in the country.

In an interview with DH’s Gyanendra Keshri, Kumar delves on the impact of the auto PLI scheme on startups, challenges due to the West Asia conflict, and the company’s expansion plans. Edited excerpts:

You recently spoke about the Production Linked Incentive (PLI) scheme creating a disadvantage for startups. Why do you believe that the policy needs a relook?

The government has done excellent work in pushing the EV ecosystem forward. Whether it is GST rationalisation, the FAME policy (Faster Adoption & Manufacturing of Electric Vehicles in India), or battery standardisation, these interventions have helped the industry significantly. However, when we look at the auto PLI scheme today, startups like us find ourselves at a disadvantage. We are competing in the same markets, selling to the same customers and financiers, but some players get a cost advantage of roughly 13-15% because of PLI benefits, while startups do not. This distorts competition in the market where startups are driving innovation. Policy should be to support innovation and startups.

What specifically prevents startups like Euler Motors from benefitting from the PLI scheme?

The original structure of the scheme required companies to meet very high thresholds in terms of group revenues and investment levels. Those numbers were extremely high for startups. Capital expenditure and revenue were the main criteria. As a result, most startups were excluded. Also, the window was not reopened later. Our view is that if a revised policy or an updated scheme comes, companies like Euler Motors should also be considered.

We have invested more than Rs 1,500 crore over the last eight years, employ over 2,000 people directly, and have built strong products in performance, efficiency and fast-charging. In several ways, we have been torchbearers in the segment. So, I believe that the policy framework now needs an update to recognise companies that have demonstrated serious commitment and execution, irrespective of legacy scale.

Do you see any impact on EV demand because of rising fuel prices and
geopolitical uncertainty?

It is still early to comment conclusively. March was very strong for us, though it is generally higher because of year-end institutional purchases and accounting-related benefits. April has stabilised at around February levels. From a customer sentiment perspective, if diesel, petrol or CNG prices continue to rise, EV adoption should accelerate further. Vehicle ownership is ultimately a 10-year economic decision, and customers evaluate long-term operating costs.

EV penetration remains low across segments. How is it evolving in the cargo category?

The three-wheeler passenger segment has seen good electrification, around 30%. In cargo three-wheelers, penetration is roughly 20-25% of new sales. Four-wheelers are still at a very early stage. Last year, electrification in that segment was around 1%; now it has reached about 3.5%. Out of roughly 2,000 electric four-wheelers sold monthly in the segment, we are currently contributing around 500 vehicles. That gives us a market share of about 25%.

What are your expansion plans going forward?

We are setting up our third manufacturing unit at Palwal in Haryana. This will add another 1,000 four-wheelers per month in single-shift capacity. Currently, we have capacity for about 1,000 three-wheelers and 300-400 four-wheelers per month in a single shift. With the new facility, overall capacity will almost double. We have outlined close to Rs 400 crore in capital expenditure for FY27. This includes plant expansion, R&D investments, product upgrades across three-wheelers and four-wheelers, and localisation initiatives. Overall, Euler Motors would have invested close to Rs 1,500 crore by now, and this new investment will be in addition to that.

How is the West Asia conflict affecting the business?

We are seeing cost increases across the board — aluminium, lithium, semiconductor chips, memory components and even gases used in electronics manufacturing. Depending on the product category, the impact has been around 4-6%. We increased prices by about 1-1.5% in April, while absorbing some of the cost increases internally.

How much of your supply chain is localised?

In three-wheelers, around 90-95% is already localised, except for battery cells. In four-wheelers, localisation is still evolving as volumes grow. Battery cells continue to come largely from China, though South Korea is also an alternative source. Semiconductor supply chains are global, with components ultimately linked to Taiwan, China and South Korea.