Optimist wants to reinvent the AC. Daikin and LG don’t need to

**Snigdha Sharma** (0:00)
If you own an air conditioner in India, you are probably running it longer this year than you did last. And your electricity bill is also probably reflecting that. This is a new normal for Indian summers, and it's only getting more expensive. AC ownership in India is rising fast, and sales are set to nearly double to 28 million units by 2030
Power consumption from household cooling could more than treble to 180 gigawatts by 2035 And by 2045, ACs alone, and listen to this clearly, could account for 35 to 45% of India's peak power demand. So the machines keeping us alive through Indian summers are also becoming one of the biggest drains on the country's energy infrastructure. And here is the even more bitter truth about this whole scenario.
Most ACs in our country are designed wrong for us. You see, standard air conditioners run on cooling cycles that are calibrated for different climates, ones that drive out too much humidity from the air. And Indian bodies need slightly higher humidity to feel comfortable. And the result is that we overcool our rooms to compensate, which drives up energy consumption even further. A 2025 study by RMI, which is a US-based clean energy non-profit, flagged exactly this problem. And this is the market that two-year-old startup called Optimist has stepped into.
Its co-founders are Ashish Goyal, who previously built UrbanLadder, and Pranav Chopra, who is a product designer who's worked across R&D consultancies in the UK and the US. They met in early 2024 and spent six months studying India's cooling market. And they concluded that the core problem, good cooling with the least energy consumption, had never actually been solved for Indian conditioners. Their answer launched late in May this year. An AC that currently holds the highest energy efficiency rating among household ACs sold across India, and it is built with components rarely used in residential cooling. And also manufactured with more than 90% local sourcing.
So the product exists. The question is whether anyone will be able to buy it.
Welcome to Daybreak, a business podcast from The Ken. I'm your host Snigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Tuesday, the 7th of July.
The engineering decisions at the heart of Optimist's product are worth understanding, because they are the ones that incumbents have actively avoided. Now, things may get a little bit technical here, but hang on, because these are also things that we should understand about our ACs anyway.
You see, most major AC brands use a conventional Fintube heat exchanger. It is easy to maintain and durable.
Optimist chose the microchannel heat exchanger instead. The component is lighter, more efficient and requires significantly less refrigerant. It is also more expensive, harder to repair and requires the cooling system to be redesigned around it. Optimist spent 15 to 18 months working through that redesign. There is something called a dual rotary compressor, which is typically found only in premium inverter ACs. It is more efficient and it reduces vibration and also delivers more stable cooling than conventional single rotary compressors. Optimist uses it as a baseline. There is also a less visible change that Chopra, who is also a product designer, considers equally important. Standard ACs in India run controlled cycles designed for a different context. One that does not account for the fact that Indian bodies need slightly higher humidity. Optimist says that it has recalibrated its cooling logic to suit local conditions. So the outcome of all this engineering is a product that beats Daikin, the Japanese brand that is widely considered a benchmark, especially on energy efficiency. Most manufacturers, including Voltas, Lloyd and Daikin, carry an ISEER rating between 5.2 and 5.8. Optimist's rating is higher than all of them. The product is manufactured at a contract facility in Haridwar, Uttarakhand. And interestingly, of the 15 key components, only one, which is the electronic expansion valve, is currently imported. Even the dual rotary compressor, initially sourced from a supplier's Chinese facility, has been manufactured in India since early 2026 For comparison, Daikin achieved nearly 70% localization through a partnership with Taiwan's Ritchie Precision, one of the few incumbents to make that investment. Goyal is explicit that Optimist's agenda goes even further. Indigenization of a design, he says, is a longer-term goal. And manufacturing alone will not win that battle. The company is already preparing for its next product launches, which is a 1.5-ton unit. Another one is also planned for November. But here is the thing about building a better AC for India. The engineering is only half of the problem. The other is getting it in front of the person who actually needs to buy one. More on that in the next segment.