EV Unicorn Ola Electric Earned INR 2 Cr In FY19, But How?

Despite not really having any disclosed operations to speak of, Bengaluru-headquartered mobility unicorn Ola Electric has actually made some money, as per its accounts for 2018-2019.

According to the Ministry of Corporate Affairs filings accessed by Inc42, the company had a total income of INR 2.13 Cr in the year ending March 31, 2019. However, how exactly it earned money remains a mystery considering that it recognises revenue based on leasing income, but there are no details about what it leases and to who?

Launched in 2019 by Ola as an independent entity, Ola Electric was said to be running several pilots involving charging solutions, battery swapping stations, and deploying vehicles across two, three and four-wheeler segments.

Ola Electric said that it is engaged in the business to “carry on the business in India and abroad of providing services across the electric vehicles value-chain including but not limited to building Infrastructure for facilitating the electric vehicles ecosystem, to engage in partnerships or joint ventures for this business with players across the electric vehicles value chain namely auto OEMs, battery manufacturers, charging infrastructure companies among others.”

Ola Electric ran an electric taxi pilot programme in Nagpur, which was subsequently discontinued due to inadequate demand. In 2018, Ola announced ‘Mission: Electric’ to have 1 Mn electric vehicles running on Indian roads by 2021.

The company has raised over $300 Mn and has already become a unicorn in two rounds of funding. Its investors include Japanese conglomerate SoftBank, parent company ANI Technologies, Hyundai Kia, Ratan Tata among others.

But on the ground, it is hard to see any fruits of Ola Electric’s labour. Ola Electric has partnered with several OEMs and battery manufacturers and intends to work closely with the automotive industry to create seamless solutions for electric vehicle operations. The company on its website claims to have enabled 4 Mn kilometres via its electric fleet and says that over 200 EVs ran on the Ola app in Nagpur.

On examining further, we noted that in terms of revenue, Ola Electric’s income includes one-time attachment fees and swapping income, which is recognised as and when the right to receive is established. This makes its operating income of INR 9.57 Lakh, making rest of the INR 2.03 Cr which is interest income and gain on financial assets.

In terms of expenses, the biggest expense for Ola Electric is manpower supply charges which is INR 6.01 Cr. However, it has no employee benefit expenses. The company paid rent charges are INR 26.2 Lakh.

For the so-called Mission: Electric, the company said that it would initially place 10K e-rickshaws and electric auto-rickshaws in its service in the next 12 months. But there has been no update in this regard from either Ola or Ola Electric.

Though Ola Electric has announced multiple partnerships and addition of independent directors on the board, it doesn’t clearly mention how it has earned the income. Inc42 reached out to the company to understand its current performance and its plan ahead, but we did not receive a response till the time of publishing.