After SoftBank Group Corp investment of $250 million( Rs 1,725 crore), Ola Electric is in plans to raise $300 million from existing and new investors, multiple people aware of the development said.
The funds are being raised as part of the company’s larger strategy to become a full-range, electric-vehicle maker by adding two-wheelers, three-wheelers and other modes of last-mile transport to its product portfolio. These funds will be used for brand building, distribution.
Recently Ola has set up the world’s largest scooter factory in Hosur, Tamil Nadu, at an investment of Rs 2,400 crore. Also, Ola’s EV arm will be rolling out a range of electric scooters within a couple months to challenge mainstream petrol-powered scooters and disrupt the nascent yet adrenaline-packed personal electric two-wheeler segment in India. The testing of these e-scooters has already begun.
Ola Electric’s scooter range is likely to be priced within 10-30% of petrol-powered counterparts, which it hopes will trigger a shift in consumer preference. This is at a time when electric two-wheeler sales slipped 5% in 2020.
As per the company, the scooters which are currently available in the market are twice the price of mainstream scooters, which is against the economics of affordability and Ola wishes to bring in its range of scooters very close to petrol engine scooters.
While electric cars have broken into the mainstream, two-wheelers have lagged behind.
Varun Dubey, head of marketing at Ola Electric, said the market is an “inflection point”, the acceptance is higher, technology has evolved, and the company is trying to bridge the “affordability gap”.
“We remain fully capitalised for our electric vehicle ambitions, including the setup of our global manufacturing facility in India,” Dubey said. “Once finished, this will be the world’s largest scooter factory with an initial capacity of 2 million units a year. We look forward to bringing this mega-factory online rapidly and putting our first electric scooter in the hands of customers in the coming months.”
He emphasised that Ola’s e-scooters will do away with the need for frequent charging and will have a uniquely removable battery to carry it anywhere.
“The nature of the scooter is changing. The engine is not the core of the product,” Dubey said. “Technology will be the soul of this category and it will be a far more tech-driven product. With all the exposure to the world of technology around us, we believe the market is already ready for the switch.”
Ola Electric believes sustainable mobility can’t be complete without a large two-wheeler penetration. The company aims to “fundamentally reimagine” how a scooter is made, sold and experienced”, including service using technology as its core.
“Ola Electric is very much a new age automotive company or a tech-centred automotive company,” Dubey said. “We are aspiring to be the world’s largest two-wheeler maker.”
The company plans to ride on scale by targeting India as well as global markets like Europe, Australia, New Zealand and Latin America to arrive at the right value proposition for the buyers. “It is going to be India’s most advanced manufacturing set up with autonomous robots, with our own AI-powered systems,” Dubey said. “We are building the right scale to enable these innovations and ecosystems.”
The company is likely to integrate itself on the infrastructure front as well, high on local content with the entire supplier ecosystem, including battery.
In 2019, Ola had spun off its electric vehicle business into a separate entity. It acquired a Dutch startup Etergo BV in May 2020. Ola Electric’s shareholders include Ola’s co-founder Bhavish Aggarwal (45%), holding company ANI Technologies Pvt. Ltd. (10%) and its employees by way of stock options (10%). The rest 35% is held by a group of existing investors—Ratan Tata, the Munjal family, Hyundai Motor Co. Ltd., Matrix Partners, Tiger Global, and SoftBank.
