Consumers have evolved, the auto industry is a few decades behind: Ola founder and CEO Bhavish Aggarwal

A sense of pride, aggression and confidence is palpable when you speak to 35-year old Bhavish Aggarwal, the founder of 2 Indian unicorns – cab aggregator Ola and EV firm Ola Electric. (Illustration: Moneycontrol)

Before every question that he fields from journalists, Ola founder and CEO Bhavish Aggarwal has a couple for them: What do they think of the new Ola electric scooter? Have they reserved one?

A sense of pride, aggression and confidence is palpable when you speak to 35-year old Aggarwal, the founder of 2 Indian unicorns – cab aggregator Ola and EV firm Ola Electric.

He's been in a race against time for the last six months, spending hours at a site in Krishnagiri in Tamil Nadu, to transform a rocky and uneven stretch covering 500 acres into Ola FutureFactory, the biggest two-wheeler plant in the world, with a capacity of 10 million vehicles per year at full capacity. One-third of the factory has now been built, with a capacity of 1 million units.

Its much-anticipated electric scooter S1 finally launched, symbolically on August 15, India's Independence Day.

Ola Electric intends to make the scooters available in 1,000 cities simultaneously, instead of going for the phase-by-phase approach taken by competitors who launched e-scooters in dominant markets, namely, Tier 1 cities.

In an interview with Moneycontrol at Ola's headquarters in Koramangala, Aggarwal opened up about the race to build the factory at breakneck speed, why he believes mobility is ripe for disruption and his rivals such as Hero Group and Tesla's Elon Musk.

EDITED EXCERPTS:

You've been in a race against time, with plans to get the factory running in months. Are you satisfied with the outcome, now that the scooter has been launched? 

We got the land in January 2021, did the Bhumi Pujan in February, and then started the work. The site needed a lot of digging, we dug 11 meters inside. End of April, we put the first pillar. The building is all ready. This was in the middle of a second wave so it was a challenging period for everybody but the team pulled it off. Kudos to the team. I don't think this kind of scale, speed, quality, and efficiency are usually seen in our country. I believe we have set a benchmark in every aspect – speed, scale, and capital efficiency. Am I satisfied? An entrepreneur is never satisfied.

Was this more challenging for you compared to Ola?

Ola is a very different company – it is a consumer internet, digital technology company, whereas Ola Electric is an industrial and energy tech company. It was a learning curve for me, I am still learning, There are people in this industry who are more learned than me but we are coming at the industry with a fresh, first principles perspective. How you build, how long, how big, how you market, the tech you put in the product, and that is our advantage

Given this 3 pronged approach – the ecosystem, drivetrain, and software, if you had to pick the one differentiating factor that you believe will be the driving force – would it be performance or software updates or the overall ecosystem?

I think this EV revolution is a revolution quite literally – it is not about taking the engine out and putting the motor in. Everything about being automotive has changed, the whole business model has changed. Starting from what you make, which is the product. The product has a lot more technology in it, a lot more software tech, lot more power in it – you can completely change what a vehicle feels and does on electrification. How you manufacture these things is very different – you can't make these in factories of the past, you have to make this in factories of the future. You need to make the batteries, motors, cells. It is a very different supply chain, the go-to-market, or how you see these products – consumers have evolved a lot.

The auto industry is still sitting a few decades behind. The consumer wants his or her product presented and purchased in a very different experience. Other categories in other industries have moved digital but automotive has not – I don't know why. There is no logical reason why. You already buy costly things online but not a vehicle. The disruption is multi-fold – it is a full business model disruption. That is what we are uniquely positioned to lead in because we have no baggage or knowledge of the past. So when we are building this we are looking at it from a first-principles lens, so it is helping us

But there is a certain aspect that helped traditional automotive manufacturers – especially in India. The two-wheeler market, there is a lot of it that comes from very simple bare-bones robust commuter bikes that do very well in rural areas. They are very mechanically simple as opposed to sophisticated, complex bikes. So, is a scooter like this (Ola) prepared to take on say, a 100cc Splendor?

The first vehicles in the world were electric. The simplest tech in the world is electric. Electric tech will explode the two-wheeler market in India. Two-wheeler penetration in India is 12 percent. Electrification will take it to 30 percent before we know it. You can't miniaturize a gasoline engine beyond a point. You can miniaturize a motor. Motors are in many ways fairly old tech. Motors used in automotive need modernization and we have built a fairly modern motor but electrification is the true technology that will take personal mobility to the masses. In terms of sturdiness, an EV has fewer moving parts than gasoline vehicles.

What percentage of the market do you hope to capture, when you say it has the potential to go to 30 percent?

I don't even look at the market as a static number. I believe two-wheelers will increase faster in penetration because of electric. And we want to drive that. We are setting up the world's biggest factory – with a capacity of 10 million units a year.

What challenges do you anticipate in the near term? Apart from the chip shortage, in terms of competition?

We don't focus much on competition. We have a lot of respect for companies that have built the two-wheeler industry in India and the individuals and promoters who have done that. We are focused on the future. Getting these products and tech in as many hands. There will be challenges in building scale, there will be challenges in building more products. When we build our bike that will have its own unique challenges.

How are you going to divide your time between Ola and Ola Electric going forward, because you recently also outlined plans to take Ola public. What's the timeline for the Ola IPO?

I am spending 24 hours a day there (Ola) and I am spending 24 hours a day there (Ola Electric). We are already in the process of Ola IPO and we will share details soon.

When do you see local cell manufacturing becoming a reality for Ola Electric? 

We are absolutely exploring how to bring cell manufacturing to India. We are exploring partnerships. India needs to produce cells, lower the cost of cells, and back end supply chain of cells. We are really working hard on that right now.

Who do you think is going to be a bigger challenger for you in a 3-5 year time frame? It is Hero Electric, Ather, Tesla?

We don't take our business decisions basis competition – be it two-wheelers or four-wheelers. I have a lot of respect for competition – especially the Indian two-wheeler makers. Pawan Munjal is an investor but also a personal inspiration for me – I also come from Ludhiana. I have looked up to them for so long. Elon Musk is an inspiration for many young people around the world. We don't make our business decisions basis competition. We all as an industry have to accelerate our journey towards electrification. We hope the industry rejects petrol and follows us in this electrification journey. It is what the country needs.