You are Kavita Rao, strategy director of Sundara Mobility in Bengaluru. A German battery maker has signed a term sheet for a joint venture that would give Sundara the cell technology its next vehicles need, and its counsel has made clear that Voltaic wants a majority. You have sixty days to turn the term sheet into binding heads of agreement, and the first thing to settle is what that request is really about.
The situation
Sundara, founded in 2009, makes electric two- and three-wheelers and battery systems: about ₹8,200 crore of revenue, a 12% EBITDA margin, 6,400 people in two plants, and 11% of India's electric three-wheeler market. It builds its own battery-management systems and software in-house, but lacks the solid-state cell chemistry its next models need, and the capital and years to develop it alone.
Voltaic Cells GmbH has that chemistry and wants what Sundara has: manufacturing, distribution and regulatory standing in India. On 12 May the two signed a term sheet for EV-Cell India at a fixed enterprise value of $300 million. Voltaic brings $170 million of cell technology and $40 million in cash; Sundara's plants, network, regulatory relationships and software team are valued independently at between $90 million and $130 million, depending on how the software is counted.
If there are no binding heads of agreement within sixty days, Voltaic is free to sign the same deal with Sundara's largest domestic rival, which would cost Sundara an estimated 3–4 points of market share within two years. And Sundara carries a scar: in 2019 a foreign licensing partner used the product roadmap Sundara had shared to launch a rival three-wheeler in Sundara's own cities. You watched that from operations. The board approved the Voltaic talks only if nothing in the final structure could let it happen again.
A partner-trust index Sundara has tracked since then reads 55 out of 100: wary rather than warm, in the words of both sides' advisers. Voltaic's counsel expects your call by Friday.