Private equity investment in India's electric vehicle (EV) industry could top a billion dollars this year, say experts, as investors see new policy initiatives and rising cost of fossil fuel accelerating the adoption of green mobility.

Investors pumped in $904 million through 26 deals in the nine months to the end of September, including in battery manufacturing and battery swapping and charging stations, according to data from Venture Intelligence. In 2021, the sector had received $1.8 billion in investment from 31 deals.

"We believe that EVs are at an inflexion point across multiple vehicle categories - the total cost of ownership is already favourable for two-wheelers and is near par for three-wheelers," Padmanabh Sinha, executive director and CIO, private equity, National Investment and Infrastructure Fund (NIIF).

These deals are taking place across the EV ecosystem, including in EV battery manufacturing companies, battery swapping and charging stations. The Narendra Modi-led government has set a goal for EVs to make up 30% of private cars, 70% of commercial vehicles and 80% of two- and three-wheelers by 2030.

This month, EV components maker Vecmocon raised $5.2 million from investors led by Tiger Global and Blume Ventures. So did Revfin, the financing platform for individual drivers, which closed a $10-million Series A round led by Green Frontier Capital (GFC), India's first venture capital fund that is focusing on climate-related investment.

In August, Exponent Energy had raised $13 million in a Series A funding round led by Lightspeed, which marked its first investment in the domestic EV space. Bengaluru-based Exponent Energy plans to use the funds to scale up its e-pump network to 100 location points per city, starting with Bengaluru. The company is backed by venture capital investors YourNest VC, 3one4 Capital and AdvantEdge VC, among others.