Battery swapping, a method that has faced challenges globally, is seeing potential in India, particularly for its two- and three-wheeler market. Canadian auto parts giant Magna International is betting on this model through its investment in Yuma Energy, a Bengaluru-based startup specializing in battery-swapping networks for electric vehicles.
Yuma, which emerged from Indian mobility startup Yulu earlier in 2023, has already completed over 60 million battery swaps and operates about 100,000 batteries within its network.
Magnus is committing an additional $35 million to Yuma, raising its stake from the initial 51% established at the joint venture’s start. This move will dilute Yulu’s 49% stake, though Yuma’s managing director, Muthu Subramanian, has not disclosed the new ownership percentages.
This investment marks Magna’s only foray into Indian startups, having previously committed $77 million combined to Yulu and Yuma, with a significant allocation of $52 million directed towards the battery-swapping venture.
Betting on India’s Gig Economy
Magna’s investment reflects the growing demand for efficient battery solutions in India’s burgeoning gig economy.
Delivery drivers often suffer loss of time and revenue while their EVs charge. Subramanian estimates that currently, only about 10% to 15% of the vehicles used by gig workers are electric, signaling vast opportunities for businesses like Yuma as the transition from gasoline takes place.
“For gig workers in India with substantial daily run times, EVs offer outstanding cost efficiency,” Subramanian told TechCrunch, emphasizing the necessity of uptime.
Targeting high-mileage riders, Yuma advocates for battery swapping as a more practical alternative to fast charging. “A battery can be exchanged in under two minutes,” Subramanian explained, contrasting this with the longer, more resource-intensive process of fast charging.
However, the establishment of such conveniences comes with significant investment, as Yuma must ensure a robust supply of batteries and infrastructure even before a full user base is achieved. Subramanian noted, “It’s a capital-intensive business; the unit economics will clarify with scale.”
While Yuma has not yet reached profitability, some older swapping stations are reportedly EBITDA-positive, achieving approximately ₹1 billion (around $10.5 million) in revenue by the financial year ending March 2026. The goal is to reach EBITDA break-even in the next two quarters, as stated by Subramanian.
To realize this, Yuma intends to leverage a significant portion of Magna’s investment to expand its swapping infrastructure and double its fleet within 12 to 18 months.
Currently, Yulu generates most of Yuma’s 60 million lifetime swaps, though this dependency is lessening; around 15% to 20% of recent swaps were made by customers other than Yulu. Yuma now serves over five fleets and integrates its batteries with more than 10 vehicle platforms, including Kinetic Green and Quantum Energy. It anticipates that non-Yulu customers will contribute 25% of its swaps within two years.
Having recently raised $93 million for its electric two-wheeler fleet, Yulu necessitates Yuma to scale its network efficiently to meet rising demands.
Yuma currently operates across 18 Indian cities, such as Bengaluru and Mumbai, with plans to expand into Chennai and Pune, as well as increasing facilities in established locations.
For the next 12 to 18 months, Yuma will prioritize India, with intentions to explore international opportunities in Southeast Asia and parts of Africa, regions with considerable two-wheeler markets.
Distinct from competitors, Yuma not only runs a swapping network but also designs and produces its battery packs and charging units at its facilities in Chennai and Bengaluru, ensuring control over both the hardware and the management network.
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