The video of an Ola electric scooter catching fire in Pune that went viral last week has three key takeaways for entrepreneurs, investors and crisis managers.
1. EVs are EVolving: Despite all the hype and excitement around the electric vehicle (EV) revolution, there's a plethora of issues yet to be resolved. From primary issues like safety, to other fundamental issues like EV business models and evolution of the ecosystem: recharging infrastructure, battery swapping, power grid capacities and pricing.
More than a 100,000 units of the Ola electric scooter were pre-booked within 24 hours, when the company announced the launch of its electric scooters on August 15 last year. Ola began deliveries in mid-December. Things seem to be cruising along well when out of the blue came this video of the e-scooter self-combusting in Lohegaon, Pune.
Now with panic spreading rapidly, the Government of India’s Ministry of Road Transport and Highways has asked the Centre for Fire, Explosive and Environment Safety to investigate the circumstances that led to the parked vehicle to go ablaze. Investigations are also expected to go into similar issue of Okinawa Scooters’ Praise Pro electric scooter which also caught fire in a separate incident in Tamil Nadu. So, while the EV market is exploding (pardon the dark pun), safety concerns need to be addressed on topmost priority.
2. While the safety issue comes to boil with these incidents, investors need to take a long hard look at the issues confronting this space that is really at the cusp of an emending automobile revolution. EVs have been introduced as a clean energy initiative as they have zero or very low emissions. While investors are justifiably buoyant - given that the flag bearer of electric mobility Tesla is among the world’s most valued companies – they must realise that there’s a lot that’s quite literally up in the air.
India is likely to push EVs aggressively in the automotive and transportation sector, to both keep our commitments to global environment but also under strong citizenry pressure, especially in large parts of India that are severely impacted by pollution.
Automakers are creating separate EV business units to be prepared for the EV boom. However, the surge in EV demand will create a huge need for charging infrastructure and the need to develop safety regulations and standards. Policies and standards around emission regulations, incentives and subsidies for consumers and manufacturers, safety standards, and clear technology roadmaps are steps that need to be taken by the government to ensure the success of EVs in the coming years. Investors will need to understand and study these developments closely instead of just staying focused on soaring valuations and the euphoria of pre-bookings of hastily announced launches.
3. Businesses are full of uncertainties and the pandemic has driven this messages home to all of us. One moment your business is running smoothly and another minute you might face a sharp crisis. In this age of social media this can be catastrophic. Business crisis can be unpredictable and may not always been within a brand control. However properly managed a crisis can be moderated and a brand can come out unscathed.
The key things to keep in mind are:
a) Always address the issue squarely. Own up that the issue has indeed happened, address customers concerns by sharing all information publicly available honestly and transparently.
b) Field the company’s CEO – not a spokesperson or a third party. Ola did well on this count, with Founder-CEO Bhavish Aggarwal's tweet emphasising safety is a priority and stating: We’re investigating this and will fix it.
c) Quickly form a credible and independent multi-stakeholder committee to investigate the matter with regular updates to media.
d) Engage with regulators and critical stakeholders and not adopt a confrontational approach.
Managing a crisis maturely will not only mitigate damage and protect a brand’s reputation from going up in flames, it can help define the course of the brand in a positive way.Lloyd Mathias is a business strategist, investor and an independent director. Views are personal.