Ola Electric has got $200 million funding at $3 billion valuation. What are you going to do with all that money? Is it primarily for manufacturing and that too at a time when we are seeing supply chain disruptions with what is happening in China?
We will use $200 million to focus on accelerating new product lines. The S1 and S1 Pro that we have launched are just the first in a range of EVs. We are starting the scooters and these are first in our range of scooters. We are also going to expand to motor bikes and then eventually cars. In terms of the factory, we remain well capitalised and we are committed towards the later part of October delivery for customers. Production trials are already on and that is pretty much on time.
The hot topic these days is also what is happening in China and supply disruptions that had to take place because that has impacted the auto sector too. The chip shortage may cause more disruptions. And now there is the energy shock. How is all that going to impact Ola Electric? Are your production and delivery timelines on track?
Yes, it is an evolving situation and we are all dealing with it. However, we do not expect delays in the timelines we have already committed.
What is the larger game plan? Is it the plan to move from scooters to cars to commercial vehicles like buses and by when?
We are going to be focussed on the urban mobility segment. We are an urban mobility brand. Our plan is quite straightforward. We have announced what we call Mission Electric and we want to move India and the world to sustainable mobility. One part of that has been our mobility services business and the second part is that we are making the vehicles sustainable. So we are going to play the full spectrum of vehicles for consumers — from two- wheelers including scooters and bikes as well as four-wheelers like cars. The larger picture there is that as electric vehicles come in, they will fundamentally alter the way people think about the vehicles themselves.
The firm factors will change the models and the modes in which people use them will change. That is where we are all headed and with Mission Electric, we would like the industry and their customers to come together so that after 2025, no more petrol two-wheelers are sold in India. It is not an easy ask but we believe that given the excitement that we are seeing on our products and the general sentiment for the consumers for electric as well as the very favourable tailwinds that in the policy and the macroeconomic scenario, we will get there.
How ready is India for electric vehicles? The largest automaker Maruti has said the country is not quite ready and enough has been said about the charging infrastructure. Now there is this semiconductor chip shortage.
About 20-21 million two-wheelers are sold in India. So, India moves on two wheelers and if you look at the data that we have in terms of the reservation numbers, on purchase day we sold about Rs 1,100 crore worth of the product. Clearly the consumers are saying that they are ready for electric vehicles. So, the consumer is ready, the government is pro-electric. We are seeing the effects on our business. So I think India is quite ready.
There will obviously be rollout periods in terms of infrastructure for chargers. We are putting up the hypercharger network but we also expect a lot of people to just use the home chargers as people have independent homes in the vast majority of India.
Even within the vehicles, the S1 Pro we have a very high range with 181 kilometres, which is good enough for most people for a week. So holistically, if we look at the trend in which these products are growing, they address pretty much all the anxieties that consumers have had thus far with electric vehicles and especially with the focus on two wheelers,
I think India’s EV revolution is going to come on two wheelers. If we step back a little and look around the world, outside of probably North America, the rest of the world primarily moves on two wheelers — south-east Asia, India, China or even large parts of Europe are quite pro two- wheelers. So if you bring EVs to two wheelers and they are largely an urban mobility product, it definitely makes it easier for a very large majority of the population to move to EVs.
Where is the large part of the volume for you going to come in from? Are EV two- wheelers going to be primarily used for fleets such as that of Amazon, Flipkart, Zomato, Swiggy, etc? Are you going to look into a tie-up?
Over the course of time, as India itself transitions to EVs, obviously these vehicles are going to make their way into various fleets. But right now, our focus has been and remains on consumers. Currently we are selling directly to consumers.
From what you are saying, it seems you are betting on a bottom-up approach. It is very different from how America has operated in terms of the four-wheeler penetration in EVs. Do you have a plan to take it to the other south-east Asian markets?
Absolutely we have stated this clearly in the past as well that the factory that we have put up in Krishnagiri or the Ola Future factory which is the largest two-wheeler factory in the world, is our global manufacturing hub. We will take the products all around to newer international markets and across Europe, UK, ASEAN and south-east Asia as well.
Do you have any timelines that you are working on? In terms of the launch of the four-wheeler that you mentioned, can we expect something as early as 2022?
Definitely our international expansion will happen in the coming months. We are right now in the midst of rolling out in India and as soon as that is over, we will get back and start focussing on international expansion. We are not sharing any timelines on cars at the moment but obviously we want to get to the various formats.
You have sold scooters worth Rs 1,100 crore in two days, that is four scooters a second. Do you have any dhamaka plans for the upcoming festive season?
We believe that the Indian consumer is quite value conscious and they are willing to pay if they feel that the value is strong. That is what we are seeing in our products. Currently, the pricing for both the S-1 and S-1 Pro are already quite aggressive. In many states like Delhi or Gujarat or even Maharashtra, with new subsidies, they are actually cheaper than their ICE counterparts. That aggressive pricing is already showing up in our sales numbers.
So we do not really see any major reason to have special pricing at the moment but as and when we come up with some Diwali plans, I will share with you.
The folks at Ola have also been talking a lot about Atmanirbhar. The future factory is going to be all women, the largest all women factory in the world. Simultaneously it is an open secret that Elon Musk has been asking the government for all kinds of incentives, import duty breaks, tax breaks. Where does Ola stand on this? Have you talked to the government with your side of the story?
Our position is quite clear. We believe India is a large domestic market and has the potential to be a global EV hub — both in terms of a market as well as a manufacturing hub. And India today has the talent and the capability to build these vehicles. We are putting up the world’s largest factory here. So, clearly it is possible.
Our view is that anybody who comes to India should ensure that they are investing in India and helping not just to bring money here but really help build the ecosystem. EV is an ecosystem play, it is not just about the vehicle. So, if there is a supply chain and innovation is needed, localisation is necessary. What we say is if you are coming to India, invest in India, make it in India. India is already a major auto export hub and there is no reason why it can’t be a major auto export hub for EVs also.
We are against people treating it just as a market for sales. Once they are here, we would be happy to compete with them. When we go international, certainly we will compete with many international peers. So we welcome the competition. We believe India deserves the investment to come for the local ecosystem to be developed. The technology and the knowhow should be here.