From ride aggregator to OEM: Ola Electric to invest Rs 2,400 crore for electric scooter plant in Tamil Nadu

From ride aggregator to OEM: Ola Electric to invest Rs 2,400 crore for electric scooter plant in Tamil Nadu

Ola Electric aims to produce 2 million electric scooters per annum initially and create 10,000 jobs at its Tamil Nadu plant.

Ola Electric has announced that it will invest Rs 2,400 crore to set up world’s largest scooter manufacturing facility in Tamil Nadu, which will not be capable of producing 2 million electric scooters per annum initially but also create almost 10,000 jobs as well. Ola Electric has already signed a Memorandum of Understanding (MoU) with Tamil Nadu government for the plant.

As it seems, Ola is making a shift from being just a ride-hailing aggregator app to an electric vehicle manufacturer. Back in 2017, Ola had floated a subsidiary Ola Electric, which is now a unicorn with around $400 million funding from Tiger Global, Matrix Partners, SoftBank, Tata Sons’ Chairman Emeritus Ratan Tata among others.

With this move, Ola Electric will now compete with brands like Hero Electric, TVS Motor Company and Bajaj Auto as well as with startups like Ather Energy and Okinawa Scooters also.

PIC

Interestingly, with the Covid-19 pandemic, even as the ride-hailing business took a massive hammering, Ola Electric has been ramping up its business. Back in May 2020, when several countries across the world were in lockdown due to the pandemic, Ola Electric announced the acquisition of the Dutch premium electric scooter manufacturer Etergo BV.

Announcing the plan, Bhavish Aggarwal, Chairman and Groupe CEO, Ola, said, “This is a significant milestone for Ola and a proud moment for our country as we rapidly progress towards realising our vision of moving the world to sustainable mobility solutions across shared and owned mobility. This will be one of the most advanced manufacturing facilities in the world. This factory will showcase India’s skill and talent to produce world-class products that will cater to global markets.”

As revealed, the electric scooters made by Ola Electric’s Tamil Nadu factory will be simultaneously launched in India and in several European markets by January 2021. The new plant will cater to the markets in Asia, Latin America as well. Last week, the company announced that it will bring its electric two-wheeler range of products to New Zealand also.

Etergo AppScooter Ola Electric

Ola Electric’s zero-emission scooter

Etergo has developed an all-electric scooter called ‘AppScooter’ that uses swappable high-density batteries to deliver a range of up to 240 km. It could be one of the products we might see Ola Electric introducing in India.

Expect the Ola electric scooter to be priced competitively against the petrol scooters, as the cab-aggregator transforming into an EV player is looking to tap into the 20 million units strong two-wheeler market in India.

Besides manufacturing electric scooters, Ola Electric is focusing on the charging and battery infrastructure as well, in a bid to offer the consumers a comprehensive solution. It is planning to set up extensive EV charging and battery wapping networks around India. Currently, Ola Electric is running several pilot projects to deploy electric vehicles and charging solutions across cities, focusing on two and three-wheelers.

Etergo AppScooter Ola Electric

Ola Electric’s futuristic visions

Earlier this year, in August 2020, Bhavish Aggarwal wrote an email to the employees saying that company plans to hire 2000 people globally over the next quarter, and 1,000 among them will be engineers. As he wrote, “Looking forward, our aim is to build electric vehicle products and the required BaaS systems for a global market and across all product segments.”

Aggarwal also said that the future belongs to electric and connected mobility and that the team at Ola is working hard to bring out the electric vehicle soon. Ola in the meantime had also set up an advanced technology centre in the US in 2019. This advanced technology centre houses engineers who work on next-generation mobility technologies.

The company appointed Julien Geffard as the Director of Go-To-Market Strategy for its electric business in Europe. Geffard previously worked as the Global Commercial Director and a member of the Board of Management at Peugeot Motorcycles. He also worked with Bentley Motors, Alpine and BMW.

Etergo AppScooter Ola Electric

Why Tamil Nadu?

In 2019, Tamil Nadu announced a comprehensive EV policy, which offers incentives and subsidies for both supply-side and demand side. The Tamil Nadu EV policy covers the electric vehicle ecosystem with incentives to the EV charging station developers, component manufacturers like battery and cell makers, electric motor makers, EV powertrains developers, battery management technology providers among others.

The state announced that it aims to set up India’s first exclusive park to promote electric vehicle production eco-system. Tamil Nadu is targeting investments of around Rs 50,000 crore in the EV segment and has announced a series of incentives to attract investments in this space under the EV policy. Through this, the state also aims to create 150,000 jobs.

Also Read: EV Vision 2030: Automobile OEMs in India need Rs 3.5 lakh crore Capex

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