This CleanTech Startup Idea from the 1001 Startup Ideas collection of YoStartups is to Retrofit ICE (Petrol/Diesel) Cars with Electric Motors. This CleanTech startup idea is about retrofitting the worn and outdated ICE cars with the electric motors and get them ready for the market as an electric car. The idea will get an equal support from users and the regulators alike due to increasing awareness about the environment and its pollution, and the overall market sentiment to shift the automobile industry towards electrification.
Market Definition for Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
As per a report on AlliedMarketResearch.com, the Global Electric Vehicle Market was valued at $103,342 million in 2016 and is projected to reach $350,963 million by 2023, growing at a CAGR of 19.8% from 2017 to 2023.
According to Global EV Outlook 2018, China presents the world’s largest electric car market and nearly 580,000 electric cars were sold in the country in 2017, up 72% from the year before. Talking in terms of market penetration, Norway is the absolute market leader with 39% of new car sales being electric.
The rise in the electric vehicle market is primarily driven by the policy environment and the extensive support that is being provided by different governments in promoting electric vehicles over ICE vehicles.
Competitor Analysis for Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
There are already a few startups and small businesses that have ventured into this territory and it was estimated in a report in The Guardian in 2016 that around 30,000 traditional petrol cars have already been transformed into electric cars by the amateurs and small businesses around the world.
There is a Utah based company, EV Wilderness, that takes the husks of worn out classic models and give them a brand new life and look. The company claims to have sold over 2000 retrofitted electric cars. Another similar company is California based, Zelectric Motors, which offers vintage Volkswagens and Porsches, fully restored and electrified using the latest lithium batteries.
Pain Point & Target Audience for Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
The target audience for the proposed startup would be the car buyers looking for cost-effective and environmentally friendly options. The early focus of the startup should be on the young generation, as they are more sensitive towards environmental issues and have aspirations to buy a great car in a limited budget.
Most of the countries are on a mission to transform the automobile industry and make it free from fossil fuel dependence over the next decade. The intent is noble, but replacing all the ICE vehicles with electric vehicles in itself may not prove to be a very environment-friendly move. As the process of building a new car is costly in terms of energy and greenhouse gas emissions. Also buying a new car could become a costly affair to the vast majority of the population.
Value Proposition | Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
The proposed startup will make use of the existing and scrap cars and retrofit them with modern mechanical parts like new electric engines, suspension and brakes and other up to date accessories, to give them a new life.
By doing this, firstly it will bring down the cost of owning an electric car which in turn will increase the adoption rate; and secondly, it will reduce the environmental footprint of electric cars by reusing the metals and other structures from the existing and the scrap cars.
Business Model | Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
The startup will start with the direct B2C model where it will sell the retrofitted electric cars directly to the customers, and at a later stage can evolve into a franchise model to cater to a wider market.
Way to Market for This CleanTech Startup Idea
The startup does not need to develop electric vehicles from group-up as it can source almost all the components from established third-party vendors and just assemble them at their warehouse. The key would be to conduct the performance and integrity & safety test of the car and get the certification from the relevant authorities in the country of launch.
Milestones for for This CleanTech Startup Idea
The startup should target to complete the structural and performance tests and optimizations on a few test cars in the first 8-10 months. The startup should also complete the basic certifications in the time so as to beta launch the car.
Once the successful beta launch, the startup should focus on building its network of vendors and suppliers so as to sustain the market demand. The startup should target to sell somewhere between 200-500 cars in the first six months of the launch.
Investment Needed for This CleanTech Startup Idea
The startup would need access to a decent amount of fund to develop and test the prototype, and it should look to raise somewhere between $250 – 500k as a seed round. The startup should target to partner with any of the auto innovation labs like Jaguar Land Rover Innovation Labs or robotics/IOT based accelerator.
Investors / Expert Take | Retrofit ICE (Petrol/Diesel) Cars with Electric Motors
With the technological advancement in the batteries, unstable fuel prices, increasing environmental awareness, there is a huge support and demand to shift towards electric vehicles. Several governments have gone a step ahead and made their vision clear about electrification of the automobile over next 5-10 years.
This poses a great challenge and an environment of uncertainty for the automobile parts manufacturer, as unlike ICE that has around 2000 parts, electric motors would have about 20; so they need to quickly adapt to the changing market or they vanish from the market.
While this sounds sad, but for the visionaries and early movers, it presents a good opportunity if they can take up the projects of electrification of the existing vehicles. Teams with prior experience of working with automobile industry would be most suited for this kind of project.
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