Ola Electric Mobility (or simply Ola Electric), which currently holds the numero uno spot in the electric two-wheeler (E2W) segment, is chalking out plans to take on Internal Combustion Engine (ICE) vehicles. Sources privy to the plans have revealed that the Bengaluru-based startup is developing three different platforms that will spawn six electric cars of various body styles at different price points.
“While the first e-car launch is slated for May 2024, a new product will be introduced every six-nine months. The models will be across various body styles such as a small hatchback, sedan, subcompact and compact SUVs, sports car, premium family MPV etc.,” said a person with direct knowledge of the company’s plans, requesting anonymity. The same source revealed that the cheapest model may be priced under Rs 10 lakh and the most expensive may be above Rs 30 lakh.
First car in 2024
The company’s founder, Bhavish Aggarwal, has already confirmed that the first model will be a premium car, which will hit the market by 2024. The other five models will be introduced over the next three years, as revealed by the sources. Aggarwal had said that Ola’s first electric car will have a range of more than 500 km on a single charge.
“In the four-wheeler space, Ola Electric aims to replicate the same strategy it had adopted in the two-wheeler market, and offer a wider range of products at competitive price points. In all probability, the EVs will be priced close to similar ICE models offered by traditional OEMs. This is largely because the cars will be heavily indigenised, including battery cells,’’ said another source aware of the company’s plans, who, too, did not wish to be named.
When contacted by Moneycontrol, the Ola Electric spokesperson said, “We have spoken about our four-wheeler plans in the past and nothing has changed. We do not have any new comments.”
Battery push
Ola Electric had recently announced that it would be investing $920 million (around Rs 7,600 crore) in Tamil Nadu to manufacture electric cars and batteries on a 2,000-acre greenfield site.
The SoftBank group-backed firm has signed an MoU with the state government to set up an EV hub, which will include advanced cell and electric vehicle manufacturing facilities, vendor and supplier parks, and an ancillary ecosystem for EVs at one single location.
Taking a cue from Tesla’s direct-to-consumer (D2C) strategy, wherein customers can book the product directly on the company’s website/ app, Ola will retail its upcoming e-cars in a similar fashion. However, just like its E2W strategy, the company will be setting up experience centres in top 10 cities in the first phase.
During CY 2022, nearly 41,675 units of e-cars were sold accounting for just 1.2 percent of total passenger vehicle (PV) sales (up from 0.5 percent penetration in 2021). Of this, Tata Motors sold 34,833 electric cars, MG sold 3,891, Hyundai 740, BYD sold 553 cars, and M&M sold 280. These were the top five e-PV players last year (per Vahan data). Per a report by P&S Intelligence, the Indian electric car market is expected to hit 3,76,000 units in 2030, with a growth rate of 33.3 percent during 2022-30.
It may be recalled that Ola Electric was established in 2017 as a wholly-owned subsidiary of ANI Technologies, the parent entity of Ola Cabs. Between December 2018 and January 2019, Aggarwal bought a 92.5 percent stake in Ola Electric from ANI Technologies at a valuation of Rs. 1 lakh, and Ola Electric was later spun-off as a separate entity. ANI Technologies continued to hold 7.5 percent stake in Ola Electric for allowing the use of the Ola brand name. The company launched its first e-scooter, the Ola S1, in May 2020.
In February 2019, Ola Electric raised $56 million from Tiger Global and Matrix India. A few months later, in May 2019, the company announced that Ratan Tata had invested an undisclosed amount in Ola Electric as part of its series A fundraise. Thereafter, in July 2019, it raised $250 million from SoftBank during its series B funding, at a valuation of over $1 billion.
“Ola has already disrupted the cab and E2W segment. However, cars are a different ballgame. We need to see whether Ola builds from scratch or acquires the car platform from somewhere. Ola may need significant efforts to disrupt the world’s most competitive market where multiple multinationals with decades of experience have bitten the dust,” stated Gaurav Vangaal, Associate Director, S&P Global Mobility.
“Yes they have the potential to disrupt the EV market with premium vehicles, but it will be difficult to predict car prices and range currently,” he added.
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