Manufacturers also believe that the way the partnership is being defined by Ola, they’ll be reduced to mere assemblers. With Ola set to tuck into margins all along the supply chain—from battery casings, to thermal management systems, to the cell itself—precious little is left for partners to chew on. “Partners will end up getting only a small concession fee for assembling these parts,” says the senior executive, who called it quits on the bidding process.
There were other issues with the process as well. Manufacturers were worried about getting into an IP war with Ola about the battery designs at a later stage.
If China—where two- and three-wheeler EV manufacturers are abundant—is any example to go by, this may well be the way of the future. “Legacy systems in automotives are going to die out. Shared and electric mobility is more about optimisation and assembly, and less about building from scratch,” says a recently hired senior executive.
Apples to Android
The employees The Ken spoke with, estimate that an Ola electric auto may only hit the streets by 2022.
In the meantime, Ola Electric is focusing on winning the battery wars.
It pitches Ola Electric in direct competition with an entity like SUN Mobility. Co-founded by Chetan Maini, who built India’s first electric car Reva, SUN’s mission is to kickstart an ecosystem for battery swapping in India.
For both SUN and Ola Electric, widespread adoption of their battery standard is critical for their business model to work. Both companies also want to address range anxiety through swapping, and reduce the upfront investment in an electric auto. “We want to take away the surprise element from the ecosystem,” says Ajay Goel, chief operating officer at SUN.
But they’re taking totally different routes to the same destination.
Unlike Ola Electric—which is building everything itself—SUN has built up an ecosystem of partnerships. “Automakers are hedging their bets since battery-swapping is still an unproven model. No one really wants to be caught off-guard if battery-swapping takes off,” explains Goel.
SUN claims to have signed eight to nine auto manufacturers to its battery platform. However, only three so far have been publicly announced. Its most recent tie-ups are with Piaggio (for its E-city Ape auto) and with Uber (to figure out where auto drivers aggregate). SUN’s partnership with Piaggio will also extend to convincing individual auto drivers to buy the vehicle. “We have to explain to them how the total cost of ownership is much cheaper than a CNG auto,” says Goel.
Working with partners, says Goel, has always been part of SUN’s DNA. “We don’t want to reinvent the wheel. SUN can’t teach Piaggio anything about building an auto,” says Goel. Instead, the company is working on an optimal, fuel-pump type grid for its battery-swapping stations.
For its plan to work though, SUN is completely dependent on partnerships with automakers and distribution partners. One has to make EVs that support swappable batteries. The other has to agree to put up SUN’s battery-swapping stations, the Quick Interchange Station (QIS), on its premises. And since SUN owns the battery–roughly half the cost of an EV–it’s harder to get manufacturers to sign up.
Goel admits that this “open, Android” approach is harder than Ola Electric’s “closed, Apple” strategy. Arguably, with its own fleet of autos and swappable batteries, Ola Electric may not have to do the hard work of convincing partners to stir its ecosystem into action, even if it has to convince auto rickshaw drivers on its platform to switch to electric. Being inclusive, like Google’s Android ecosystem, though, gives SUN more legs to stand on.
Race to a million
It’s a race to get to a million vehicles first. SUN may have gotten a head start, but it will struggle to match a well-capitalised Ola, and its captive fleet of 1,00,000 auto drivers on the ride-sharing platform.
SUN, claims Goel, was focused on getting the technology right so far. As of 2019, the company has deployed only 4 stations. “We’re now in roll out mode,” says Goel. Ola, however, already present in over 125 different cities across the country and with cash to burn, could rapidly scale its battery-swapping infrastructure. This could potentially lure third-party manufacturers to adopt Ola’s battery standard, simply for the convenience provided by a dense, pan-India swapping infrastructure.