Nagesh is 27, based in Mysore, and has been driving vehicles to distribute FMCG products to distributors for the past few years. He is the proud owner of two Light Commercial Vehicles (LCVs) – a Tata Ace and a Piaggio Ape; he drives one himself, and has hired a driver for the other. He has been hearing about electric vehicles for the past couple of years, and some of his friends have bought them already. The top manufacturers have launched electric vehicles, and there’s good feedback on their reliability, capacity and range. Plus diesel prices are so high that EVs are looking more and more attractive.


However, he still has several concerns before he can take the plunge. Finding the right vehicle is far from simple: there are too many products with various combinations of range, battery life, load capacity and charging time, and nobody to help him make sense of these numbers. Further, while the Total Cost of Ownership (TCO) of an electric vehicle is lower, the up-front down payment is 2-3x that of a diesel vehicle, even after financing. Where will he get so much money? There’s also the question of terminal value: when he sells his vehicles after 3-4 years of use, he has no idea what the EV will be worth at that time.


Our newest portfolio company, Turno, is helping Nagesh buy his commercial electric vehicle with confidence. As pointed above, the economics of small commercial EVs work today – not in some rosy electric future. However, their adoption has been slow: the entire industry sells a few hundred vehicles a month. Nagesh’s three concerns – of choice, financing and residual value – need to be solved before commercial EVs see mass adoption in India.


Unlike consumer EVs, commercial vehicle purchases are driven by sales rather than marketing. The buyer is making a hard-nosed economic decision, and the current sales channel is wholly incapable of explaining the complex economic tradeoffs to him. For example, the interplay between range, charging method and battery life delivers different optima for different kinds of usage. Should you sweat your asset 14 hours a day, even at the cost of fast-charging the battery daily and reducing battery life? Should you optimize for range or load-bearing capacity if you charge the vehicle overnight? Such considerations require an EV-specific sales channel that Turno is building to drive commercial EV adoption.


The other key piece of the puzzle is financing. When it comes to EVs, traditional financiers (banks and NBFCs) underwrite the buyer, not the asset. They also find it hard to predict the resale value of the vehicle and consequently offer a very low loan-to-value ratio (usually no more than 60-65%). Combined with the higher up-front cost of the vehicle, this makes it prohibitively expensive for the buyer. Turno solves for this by estimating battery degradation more precisely for the vehicles it underwrites, allowing the financier to value the security, not only the borrower. A buyer on Turno’s platform can get financing for as much as 90% of the vehicle’s value, making it affordable for the bulk of the country’s commercial vehicle buyers.


Lastly, the company offers protection to the buyers in the form of a guaranteed buyback at various points in the battery degradation cycle. This allows the buyer to estimate its terminal value based on usage, allowing them to buy the vehicle with confidence.


Turno is able to get the ecosystem together because of the domain experience of its founders – Hemanth and Sudhi – who have previously worked together in the leadership team of Zoomcar. In addition to a keen understanding of the automotive market and the EV ecosystem, they bring deep insights about the customer and a strong execution track record. Their vision of making Turno into the lynchpin of the commercial EV value chain by bringing together sales, financing and repurchase strongly resonates with us, and we are backing them to out-execute everybody else in selling commercial EVs.


Often in technology innovations, it is not the player who solves the first piece of the puzzle that creates the most value, but the one who lays down its last piece. The innovations of the last decade have focused on batteries, chargers, battery management systems and reliable vehicles. Turno is completing the loop by innovating on the commercialization of electric vehicles. This is the last piece of the puzzle, and by laying it down Turno hopes to unleash the electric revolution on Indian roads. They have already shown early signs of success on that front, and we are looking forward to much more on the journey ahead.


Authored by: Arpit Maheshwari and Ritesh Banglani