B Capital co-leads $6m round in Indian EV battery buyback firm

Hemanth Aluru, CEO and co-founder, Turno / Photo Credit: Turno

India’s logistics industry has seen a rise in the popularity of electric three-wheelers recently. Sales of these vehicles hit record levels, rising by 57% in the financial year ended March 2024.

However, while incentives by the Indian government have helped speed up EV adoption, there are still hesitancy in the logistics market to make the switch.

“Batteries are not going to last as long as [internal combustion] engines used to in a vehicle and have to be replaced at some point,” Hemanth Aluru, CEO and co-founder of Indian EV distribution and financing firm Turno, told Tech in Asia. This, he says, is the biggest problem in the entire market: “What happens to the vehicle when it comes to the end of its life?”

Turno, which just secured US$6 million to extend its series A round, is working to solve this problem. The round was co-led by British International Investment, Quona Capital, Stellaris Venture Partners, and B Capital.

The fresh funds will help grow the business and assist it in developing new initiatives to boost commercial EVs. This includes its guaranteed buyback of used batteries within three years, allowing the firm to reduce the cost of vehicle ownership.

Turno expects the buyback offering to drive the EV resale market, as batteries makes up nearly 40% of the cost of a vehicle.

In India, small last-mile delivery operators typically factor in the resale value of a vehicle in their purchase decisions. While the used-car market for fossil fuel vehicles is estimated to be worth US$31.6 billion this year, the current resale value for EVs is nearly non-existent.

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EV automakers globally, too, have been struggling to build a resale market for their products.

In Turno’s battery buyback program, the used batteries are refurbished using Turno’s proprietary battery technology. These refurbished units are then sold to microgrids – self-sufficient energy systems powering a small area, which include solar power plants.

Turno is currently running proof-of-concept projects where they have partnered with companies that help them sell these batteries to microgrids, says CEO Aluru. He didn’t disclose which companies it has partnered with, however.

That said, Turno’s core business lies in offering financing solutions to small businesses and individuals looking to purchase commercial electric three-wheelers. These are loans for a tenure of three to four years and with an interest rate of between 18% to 24%.

Its typical customers include manufacturing units, garment distributors, water can suppliers, FMCG suppliers, and vegetable and fruit sellers. Aluru said the company has helped finance over 5,000 electric three-wheeler units to date.