Ola has setup an independent company to power its EV initiative
Ola will also focus on efficient battery management systems to operate the vehicles
Also in talks with Hyundai to invest up to $200 Mn - $300 Mn
Going along with the Indian government’s initiative to make India a leader in the global emobility space, Bengaluru-based cab aggregating platform Ola is reportedly in talks with Indian automakers for procuring custom made electric and connected vehicles for its own fleet of cabs.
Citing three unnamed sources, a Livemint report said that these vehicles, currently known as “Special Purpose Vehicles” will be to some extent designed by Ola executives. The names of the automobiles companies were however not disclosed.
The company is also in talks with the company to focus on efficient battery management systems which are important for operating such vehicles especially those working on a mass scale.
According to the sources, the company is planning to purchase vehicles, especially from three and four-wheeler segment. It is aiming to deploy 1 Mn electric vehicles on Indian roads by 2022.
Ola may be looking to follow the strategy of China’s ride hailing giant Didi Chuxing who joined hands with Volkswagen AG for procurement of custom-made vehicles.
While a recent survey by Maruti Suzuki showed that Indian fleet operators are reluctant to pay a premium of more than 20% for an electric vehicle, Bhavish Agarwal-owned Ola has been continuously pushing ahead in its efforts to provide green and clean cabs for its users.
Ola continues to remain bullish about the segment even after it tasted failure with its pilot EV project in Nagpur in 2018. The project had failed after drivers were looking to return their electric cars and switch back to petrol or diesel cars due to high operating expense and long waiting time at charging stations.
It’s efforts to stay ahead in the EV segment also comes in at a time when the central government approved FAME II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) scheme.
During a recent meeting of policymakers and industry stakeholders under the aegis of the Department of Heavy Industry, the government also said that only fleet operators will be able to avail of incentives meant for four wheelers under the scheme. Individual owners of electric four-wheelers will not receive the benefits. This move may not only encourage the fleet operators but also help in boosting adaption of electric vehicles as a mode of public transportation.
Ola’s EV Foray Helping It To Keep SoftBank At Bay?
In order to step up its game, earlier in March, Ola had set up an independent company — Ola Electric Mobility Pvt Ltd to develop platforms and infrastructure to make electric mobility. It also raised funding of $56 Mn (INR 400 Cr) from Ola’s early investors, Tiger Global and Matrix India among others.
Also, it has been reported that South-Korean automaker Hyundai Motors is in talks with Ola to invest up to $200 Mn – $300 Mn (INR 1392 Cr- 2089 Cr).
The initiative to foray into the electric vehicle segment with the help of the automobile makers is also helping Ola keep SoftBank from investing in the company and increasing its current stake of 26%. In 2017, it also amended its Articles of Association to include a clause that prevents SoftBank from buying more shares in Ola without the approval from the company’s founders and board.
In February, Ola announced that Flipkart cofounder Sachin Bansal had led an investment of $92 Mn (INR 640 Cr.) in the company as a part of its ongoing Series J funding round.
Prior to this, the company had also raised $74 Mn (INR 515 Cr) from its existing investor, a Hong Kong-and London-based hedge fund, Steadview Capital, through preference shares at a subscription price of $301 (INR 20,959) per preference share, according to a company filing accessed by Inc42.