Can Ola’s CEO realize his electric car dream amid the harsh realities on the ground?
As Ola founder Bhavish Aggarwal shifts gears to give wings to his electric car dream, pundits are a little wary of his fast moves on the EV front as Ola Electric hasn’t yet solidified its position in the crowded market for electric two-wheelers, in the middle of the government. scrutiny of “unfair practices” on ride-sharing platforms, battery fire probes, hundreds of layoffs and high-profile company exits.
Aggarwal has pressed the EV throttle hard as Ola’s electric two-wheeler sales now head south.
On August 15, when the company showed off its next electric car which claims to give 500km in a single shift and can go from zero to 100km in 4 seconds, the company had only sold around 1,400 Ola S1 and S1 scooters. Pro during the first 15 days. of the month (according to VAHAN government data).
In July, Ola Electric sold 3,861 vehicles, a significant drop from 5,891 vehicles in June. The numbers are dropping month by month.
Hero Electric led the electric two-wheeler segment, selling 8,952 vehicles in July, followed by Okinawa Autotech with 8,094 vehicles.
Industry experts say Ola needs to move slowly, fix the house first and cater to new consumers who are afraid to book electric two-wheelers amid fears.
“Ola is facing issues with his two-wheelers. There have been some scattered incidents of these electric vehicles catching fire. In addition, Ola was forced to recall over 1,400 vehicles a few months ago, which sparked concerns about the reliability of Ola scooters among consumers,” Soumen Mandal, senior research analyst at Counterpoint Research, told IANS.
“Further such incidents could harm consumers’ intention to buy electric vehicles. The government has already intervened in this matter to find a solution,” he added.
As Ola Electric CEO Aggarwal ramps up the electric vehicle business, media reports say the ridesharing platform was set to lay off around 1,000 employees across all verticals.
However, according to sources close to the company, these layoffs could affect fewer than 500 employees and not 1,000, and “are the result of a restructuring of the Cars and Dash businesses”, which the company closed.
The company had nearly 1,100 employees in its core ride-sharing business, which has recently become a problem for daily commuters, along with Uber.
The two companies were recently arrested by the Central Consumer Protection Authority (CCPA), which reports to the Ministry of Consumer Affairs, which sent them formal notices for “unfair commercial practices” and violation of consumer rights.
The main issues raised were poor service, insufficient consumer grievance mechanism, unreasonable levying of cancellation charges and inclusion of charges for additional services through pre-ticked boxes without explicit consent prior to each route.
Crucially, battery fires rocked the entire nation for several months this summer, leading Union Road Transport and Highways Minister Nitin Gadkari to tell Parliament that all these electric two-wheeler companies received show cause notices whose vehicles caught fire. due to battery issues.
The ministry has established a committee of experts to propose safety standards for batteries, battery components and related systems.
The CCPA has also received several complaints from buyers of electric two-wheelers.
Ola Electric is now aiming to invest more in its electric car, home battery cell manufacturing and financial services businesses.
Amid the myriad of challenges, Aggarwal has pushed ahead with his electric car dream, saying India must become the global epicenter of the electric vehicle revolution and control 25% of the global car market.
EV penetration in the two-wheeler and passenger vehicle categories in India was 3.7% and 1.2%, respectively, in Q2 (Q2 2022).
India is at a nascent stage of EV adoption and there is a huge opportunity for Ola to become one of the significant players in the EV ecosystem, if it plays its cards right and avoids more controversies.
Currently, the electric car space in India is dominated by Tata Motors, followed by MG Motor, Hyundai Motor, Mahindra & Mahindra and Kia Motors.
Maruti Suzuki, which has a significant 40% share of India’s passenger vehicle market, has yet to enter the electric car market.
“We believe it is the right time for new players to enter this space in India and benefit from the ongoing transition to connected electric mobility,” Mandal said.
Ola is trying to gradually build its own electric vehicle value chain, starting with taxi rental services, vehicle manufacturing and charging infrastructure to battery cell manufacturing.
Going forward, it could target creating its own software services, advanced driver assistance systems (ADAS) and connectivity technologies, keeping in mind the multiple growth of the connected electric vehicle space.
“Ola will find it relatively easy to push its EVs for car rental and taxi services with charging infrastructure at designated locations. This will help it increase EV sales while converting the rental fleet into a greener fleet,” Mandal told IANS.
However, this requires more than completing the assembly lines in much faster time than global standards, while being humbled by the colossal task, because a local electric car is something that should not go wrong for a country. which aspires to achieve its 2030 EV dream ambition.
(Nishant Arora can be reached at [email protected])
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)