For instance, Piaggio’s recently launched electric auto is priced at Rs 1.97 lakh ($2754), compared to a Bajaj RE auto, which currently retails at Rs 2.25 lakh ($3145).
But the real icing on the EV auto here is the swappable battery.
In addition to owning the auto to lease/sell to potential customers, Ola plans to establish a battery-as-a-service model for these autos. At a pilot project in Gurugram, where it set up a swapping kiosk for e-rickshaws, Ola charges Rs 200 ($2.80) for three to four swaps a day for an electric rickshaw. It plans to set up a much wider swapping network based on the data from the pilot. “We have been able to run that business on a profitable basis,” says the employee mentioned above.
Without the need to que up for CNG, autos can increase their run time by 30-40%. This helps flatten the upfront cost of purchasing an electric auto quickly. “We found that e-rickshaw drivers were able to earn 30% more with swapping,” says a researcher with Ola.
For the Gurugram pilot, Ola procured batteries from the market, but wasn’t happy with the quality. “An e-rickshaw runs on a smaller radius than autos. It usually has fixed points of pick-up and drop-off. Autos have a less predictable route,” says a senior executive of a component manufacturing company, who is familiar with Ola Electric’s plans. He wished not to be identified. With a larger, more unpredictable radius, the density of the battery and its capacity also changes.
Ola Electric believes that getting battery specifications like size, density, and safety right will create a standard for the entire shared electric mobility ecosystem in India. “We should take a stand and create our own battery type. Or risk being flooded with the Chinese Guobiao (GB) standard for running our EVs,” said a recent senior hire at Ola Electric, who spoke anonymously to avoid jeopardising his appointment. GB is the most commonly used standard for batteries used in Chinese EVs.
Owning the battery standard, then, becomes Ola Electric’s key to unlock scale and profitability.
Ola Electric’s parent company is no stranger to electric experiments. In partnership with automotive major Mahindra, Ola ran a pilot with around 200 electric cars and autos in Nagpur, Maharashtra in 2017-18. However, according to a report from Reuters, the pilot failed due to a variety of reasons.
One of the key reasons Ola Electric split from its parent company, was to allow it to cut ties with this past and develop a different character. “We are going to be an asset-heavy company, while Ola is asset-light,” says one of the employees mentioned above.
Ola Electric, with its $300 million plus runway, also gives Ola a long landing strip for EV experimentation. Building a new vehicle, and battery, from scratch needs new blood.
According to LinkedIn insights, Ola Electric has been on a hiring spree over 2019. The company has poached top executives like Piaggio’s product head Saurabh Grover to help build up its chops as a bonafide manufacturer. Hiring Grover is a particularly interesting move, since he was in-charge of setting up Piaggio India’s electric auto division.
With the help of its senior hires from Tata and Mahindra, Ola Electric put together an advisory council to steer its transition into a manufacturer. According to information sourced by The Ken, this council has issued Requests for Proposals (RFPs) for an electric three-wheeler and battery. Ola Electric’s representatives have even shown up at tyre supplier meets, drumming up interest for their “project”.
“The process isn’t very different from how traditional auto manufacturers engage with component makers,” says the senior executive mentioned above. Ola’s bidding process was conducted in stages and no manufacturer was ever given the whole picture in one go. “At each stage, Ola wanted to gauge if we had skin in the game,” says the executive.
The process, claims the executive, is tightly controlled for a reason. To own the whole ecosystem, Ola needs to make sure no other player can get their hands on their custom battery or EV designs.
This has made it tricky for manufacturers to sign on the dotted line, despite Ola Electric’s promise of a quick scale up. After all, Ola lacks any legacy when it comes to auto manufacturing. “This isn’t Maruti asking us to build. Ola can talk big numbers but they’ve never built a vehicle or battery before,” says the senior executive.