The company’s ample fundraising rounds were also accompanied by an almost 200% growth in hiring, drawn from the ranks of traditional automotive companies like Tata, Mahindra, Hero, and Piaggio. But there has been little to no clarity on what Ola Electric will actually do.
Right up till now.
According to information sourced by The Ken, Ola Electric’s plan to get to a million EVs is by designing and creating its own electric three-wheeler auto, and lithium-ion (li-ion) batteries.
“That way, we control the whole EV supply chain,” says an Ola Electric employee, who wished not to be named as he isn’t authorised to speak to the media. The aim, says the employee, is to quickly create a formidable ecosystem by leveraging Ola’s current scale as the largest ride-hailing service in India.
Ola has already tied up with engineering major Bosch to design and manufacture the li-ion batteries, and is negotiating with other component manufacturers for the electric auto. As a senior industry executive told The Ken, Ola Electric has set up an internal committee to invite bids from potential component partners.
The actions taken
Designing an auto—and its batteries—from scratch is a bold move, one totally unprecedented in India’s nascent EV sector. Companies usually stick to their knitting. They’re either manufacturers like Hero, Ather and Bajaj; battery-makers like Bosch and Panasonic; or service providers like ABB and SUN Mobility, who’ve set up charging and battery swapping stations.
Ola Electric, though, wants to do away with these distinctions.
“Ola wants to own the whole electric ecosystem, from vehicle to battery. In the future, we want other players to source from us,” says the employee mentioned above.
In the long run, Ola wants to disrupt the shared mobility market. With a fit-for-purpose auto, a self-designed battery, a pan-India presence in 125 cities, and almost 200 million riders on its platform every day, it is arguably in a sweet spot to do so.
So far, the use of EVs in fleets has been restricted to small use cases. For instance, Bengaluru-based Lithium runs an electric cab service, but is struggling to scale its service. With about 1,100 cars, it’s currently the largest EV fleet operator in India. Smart-E, which runs a fleet of 1,000 plus electric rickshaws in Gurugram, hasn’t yet grown beyond the National Capital Region. These fleet services run in silos.
With rapid urbanisation, daily passenger trips in 87 urban centers in India will grow to 490 million by 2031 from 229 million in 2007. Smaller form-factors, like three-wheeler auto rickshaws, will have to cater to a large part of this demand. Increasingly, these options must become more sustainable and affordable as cities grow. That’s where electric mobility comes in. In fact, almost 48% of three-wheelers will be electric by 2024, according to a recent study by CRISIL Research.
Still, scaling to a million EVs within a year is no joke. Ola Electric is also stretching its DNA into particularly thorny issues of the EV ecosystem. Separating battery from vehicle. Establishing battery standards. Building a fit-for-purpose electric auto rickshaw that can withstand the rough and heated Indian road conditions. And finally, getting auto rickshaw drivers to actually invest in these autos at a reasonable price. It’s a lot to chew on for a company that still has no teeth in its bite.
By trying to control everything, Ola Electric is building the perfect anti-ecosystem. So far, competitors like SUN Mobility, a battery-swapping solution provider, were trying to piece together an ecosystem through partnerships.
Ola Electric has turned that plan on its head
Making the business case
Autos are a nifty way to get around congested cities. They’re also cheaper, on average, than hailing a cab for the same distance. On Ola’s own platform, autos charge Rs 7.25 ($0.10) per kilometer, compared to what its cheapest cab tier Micro charges—Rs 8.5 ($0.12) per kilometer. According to a figure shared by the company in 2017, autos made up 15% of Ola’s ride revenue.
The use case for an electric auto becomes even more compelling. At Rs 0.5 ($0.007) per kilometer, running costs of an electric auto are less than half of its CNG variant. Electric vehicles also have one-tenth the parts of a traditional vehicle with an internal combustion engine. “This means a lower cost of repair and maintenance,” says the Ola Electric employee mentioned above. The total cost of ownership for an auto driver, therefore, comes down considerably.