“India has a very strong role to play in the future of electric and it is incumbent upon us to really push India on a global stage in this very necessary technology of the future.”
BHAVISHAG GARWAL CHAIR MAN AND GROUP CEO,OLA
“IT’S SIMPLISTIC TO say that ‘Ola is the Tesla of India’ or ‘the Uber of India’. But we’re not. We are the Ola of the world.”
Bhavish Aggarwal, the 35-year-old founder of ride-hailing unicorn Ola, minces no words when outlining the scale of ambition he has for Ola Electric. The past two months have been awash with news about the startup’s planned ₹2,400-crore mega factory in Krishnagiri, Tamil Nadu. At its full capacity of 10 million units by next year, Ola’s Future Factory will roll out one electric scooter (e-scooter) every two seconds. Once completed, the 500-acre factory—the world’s largest two-wheeler plant— will account for 15% of the world’s two-wheeler production. Clearly, Aggarwal wants nothing less than an electric vehicle (EV) revolution.
“When we started offwith electric mobility, we had two choices: do we play incremental and small, or do we play disruptive and big? We chose the latter,” says Aggarwal, chairman and group CEO, Ola. “We have to play a technology game to compete with global leaders on a global stage. Our ambition is to be one of the world’s leading EV companies.” Ola Electric was carved out of Bengaluru-based Ola in 2017 and became a unicorn two years later, backed by Tiger Global, Matrix Partners, and SoftBank.
Ola’s game plan is simple: build economies of scale to get the “most aggressively priced” two-wheeler into the market in the next few months, and a four-wheeler by 2023. “You can’t produce EVs at low cost unless you play at scale,” says Aggarwal. Varun Dubey, Ola Electric’s head of marketing, concurs. “If you want to break the market, it’s not going to happen if you sell 2,000-4,000 units,” he says. Around 30%-40% of the factory’s produce, says Aggarwal, will be earmarked for exports to Europe, Asia, and Latin America. It also plans to start production in key foreign markets down the road.
BUT BEFORE IT takes on the world, Ola has to do battle on its home turf, the largest two-wheeler market in the world. In a highly fragmented EV industry, Ola will be competing with legacy players like Bajaj Auto, TVS Motor, and Hero Electric, as well as new-age startups like Ather Energy, Okinawa Autotech, and Ampere Vehicles. But given Ola’s planned production capacity is half the size of India’s entire ICE (internal combustion engine) twowheeler market, it is clearly gunning for everyone. “Already 20 million people are buying two-wheelers. Our intent is not to start creating demand for electric. There is a huge demand for a better scooter. This is not the best e-scooter, but the best scooter you can buy,” Dubey explains.
From Kinetic Honda to Bajaj Chetak, the quintessential Indian middle class has always embraced the scooter as their preferred mode of transport. But despite that ubiquity, India sells only around 150,000 electric two-wheelers a year, which is less than 1% of the total market and ranks it outside the top three globally. To promote the use of EVs, the government announced a ₹10,000-crore outlay in March 2019 for the second phase of its Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles, or FAME-II, scheme. That push, a wider choice of vehicles, and growing awareness of an EV’s cost-benefit will propel the industry. Consulting firm McKinsey forecasts sales of 4.5 million to 5 million units, or 25%-30% of the market, in FY25.
A FACTORY OF THE FUTURE
Ola Electric’s proposed mega factory, called the Future Factory, at Tamil Nadu’s Krishnagiri, is expected to be completed by next year. But e-scooters will start rolling off its assembly from June this year.
The upcoming plant will be the world’s largest twowheeler factory, built on 500 acres in Tamil Nadu, with an investment of ₹2,400 crore.
The integrated manufacturing facility will house operations for battery, paint shop, welding, motor, general assembly, finished goods, and will also have two supplier parks. The plant will also have its own test track.
Built using Industry 4.0 smart manufacturing techniques, the factory will use 3,000 robots across various operations and is expected to create 10,000 jobs.
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