Web Exclusive
Ola to showcase concept electric vehicles, in talks with component vendors

File photo of Ola CEO Bhavish Aggarwal
BBhavish Aggarwal-led Ola is all set to go beyond being just a cab aggregator. The company will soon showcase its concept electric vehicles, including an electric three-wheeler and perhaps four-wheel drives as well, based on feedback from its multi-modal electric-vehicle project on the Ola platform in Nagpur.
 

The company has already started talks with a bevy of potential vendors who could supply the components, the most important of which is the lithium battery from across the world, to roll out a commercial model. The battery, according to experts, accounts for over 50 per cent of the vehicle cost.

 

According to sources in the know, Ola could manufacture the electric vehicle on its own or get into an arrangement where it has a complete control over the manufacturing process. A final decision on the commercialisation aspect for the vehicle, however, has still to be taken. Ola’s multi-modal project, in which electric cars, autos, buses and e-rickshaws ran in tandem in Nagpur, with a mileage of over 5 million kilometres, offered the company valuable data insights on the challenges of building a e-vehicle ground-up for Indian markets. When contacted, a spokesperson for Ola declined to comment on the proposed showcasing of the electric vehicle.

ALSO READ: CCI rejects allegations of price fixing against Ola and Uber

 

The EV space has become more attractive lately, with changes to the country’s enabling policy for such vehicles. Now, permits required for commercial use of such vehicles has been scrapped. This will go a long way in reducing the total cost of acquiring a vehicle. Earlier, the limited number permits issued were sometimes sold in the black market. Also, with the government now planning to permit individuals to run their own electric-vehicle charging stations, there will soon be an ecosystem for the proliferation of such an EV infrastructure.

 

Ola, however, is not the only player in the game. In the three-wheeler space, Bajaj Auto, the largest player in the segment with a wide control of the market for decades, is also working on models for electric rickshaws. It has also demonstrated some of them — and it already has the investment and distribution in place to push such products in the marketplace.

ALSO READ: After Australia and UK, Ola drives into New Zealand's three largest cities

 

The challenge is even tougher in the four-wheeler space, where global companies are spending billions of dollars and have already commercialised electric cars in the market. Most of these companies, such as Hyundai, Nissan and Suzuki, have announced plans for electric cars which require large investments. Even in the two-wheeler market, Indian players like Ather Energy have launched electric scooters but priced them high, a factor which could be a major challenge for their initial adoption.

 

Also, according to experts, the commercialisation of electric vehicles could take 36 months to as much as 60 months, and that would require substantial fresh investments. Some analysts say it will be interesting to see if a new player like Ola, whose core business is not manufacturing would like to divert its attention to an area that requires a different expertise. Or will it merely offer its designs to manufacturers who are in the field and already have a distribution network in the market.

ALSO READ: Ola plans grocery delivery biz relaunch in early 2019 ahead of Uber's entry

 

But Ola has already put together a mobility team under Anand Shah, who has worked in various automobile companies, with the mandate to design and build e-vehicles. The advantage that Ola has over traditional rivals is that the company and its driver partners could become a large captive market for the product, and create enough volumes to support the charging infrastructure. Besides, Ola has now also moved beyond India to markets in Australia and the UK, and Europe is its next big stop. This could give it enough volumes to justify an investment in assembling the product in India.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel