If all goes according to plan, his Ola Electric Mobility Pvt. aims to produce 10 million vehicles per year, or 15% of the world’s e-scooters, by the summer of 2022, with sales beginning later this year in other countries. A watershed moment for one of India’s most promising startups.
Bhavish Aggarwal looks out over a 500-acre expanse ringed by neon-painted buildings, small shrines, and mango groves. On this barren plot on Bangalore’s outskirts, the high-profile Ola founder hopes to erect the world’s largest electric scooter plant within the next 12 weeks, producing around 2 million scooters per year.
Aggarwal’s proposed $330 million mega-factory, located two and a half hours southeast of Bangalore, is a bold foray into uncharted territory for an entrepreneur who has spent ten years creating a ride-hailing behemoth. Ola Electric, his follow-up, is entering an electric vehicle market crowded with names like Tesla Inc. and China’s Nio Inc., albeit with a modest two-wheeler at first, but that could play in a $200 billion domestic EV industry in a decade.
If all goes according to plan, his Ola Electric Mobility Pvt. aims to produce 10 million vehicles per year, or 15% of the world’s e-scooters, by the summer of 2022, with sales beginning later this year in other countries. After the plant expands next year, one scooter will be released every two seconds. It’s the first step toward Aggarwal’s aim of eventually producing a full range of electric vehicles to support Prime Minister Narendra Modi’s Make in India and sustainable mobility goals.
In an interview last week, the 35-year-old said, “It’s a vehicle we’ve engineered from the ground up so India can get a place at the world EV table.” “Indian businesses have the intelligence and energy to leapfrog into the future of manufacturing,” says the study.
Aggarwal is entering the market at a time when ride-core hailing’s business is slowing due to the pandemic. In India’s notoriously polluted cities, fume-spewing scooters and motorcycles remain the most common mode of transportation. However, the country is now promoting electric vehicles and battery self-sufficiency, which, according to the CEEW Centre for Energy Finance, could support a $206 billion EV market in ten years.
That isn’t going to be fast. Middle-class Indians are concerned about air quality, but are hesitant to pay twice as much for an electric scooter at current prices. Not only will Aggarwal face competition from local rivals Hero MotoCorp and Bajaj Auto, but also from up-and-comers like Ather Energy and Chinese brands like Niu Technologies.
Tesla, Nio, and Xpeng Inc., for example, have out-engineered proven auto giants with ever-cheaper batteries and over-the-air software capabilities, but the entrepreneur is taking a different approach. He intends to market low-cost two-, three-, and four-wheelers for city use. He said, “Our ambition is to create the world’s leading urban mobility electric vehicle business.
“Aggarwal’s second act is Ola Electric. He invented ride-hailing in the United States a decade ago, taking on Uber Technologies Inc. and spreading across 200 cities before expanding internationally to the United Kingdom, Australia, and New Zealand. His electric vehicle company was established in 2017 and became a unicorn two years later after SoftBank Group Corp. and Tiger Global Management invested hundreds of millions of dollars. Even though Aggarwal had battled them to keep hold of Ola, it was the second time for the pair of global investors.
He’s in the driver’s seat even more this time around. He’s also received funding from Hyundai Motor Co. and Kia Motors Corp., as well as other supporters whose identities he won’t disclose.
“We’re well-capitalized, and investor interest is at an all-time high,” Aggarwal said.
Aggarwal, who often interrupts himself to inquire, “What do you think?” wants to start with five two-wheeler models, including mass-market, luxury, and self-balancing models. He also goes so far as to claim that the first electric cars will be on Indian roads in 18 to 24 months. He speaks about marketing self-driving cars and futuristic four-wheelers that don’t look like cars in the future.
He zipped around on a sleek scooter prototype in the office park in the Koramangala area, the epicentre of Bangalore’s startup scene, on this particular Thursday. He displayed revolutionary lighting, replaceable batteries, and a large storage trunk. His aim is to market the scooters both online and via dealerships, with monthly payment plans available to make it easier on buyers’ wallets.
Vehicle affordability, which comes down to the cost per kilometre of service, may be the secret to breaking into the Indian market. Aggarwal isn’t saying how much his product would cost just yet, but he says it will compete with conventional scooters that cost about $1,000 each. “We’ll save money by playing at a larger scale.”
Ola is developing, engineering, and producing its own battery pack, motor, vehicle computer, and software to keep costs down. It, like Tesla, aims to cut costs by making its own power cells. It’s putting charging and battery-swapping stations to the test. It bought Amsterdam-based smart scooter startup Etergo BV last year to jumpstart its own scooter production.
More than 3,000 robots will operate alongside 10,000 people at Ola’s plant. The job will be divided up using software developed by the company’s 1,000-member team, which is mainly made up of engineers. The factory’s roof would be solar-paneled, making it carbon-negative. Around half of the scooter components will be manufactured at two supplier parks on either end of the complex.
Aggarwal keeps a close eye on it. He walks around the construction site once a week to check on the development. On other days, cameras mounted on tall pipes around the construction site transmit live video to his desk. His pride is obvious: as a graduate of the prestigious Indian Institute of Technology, he claims to have invented and patented the automated storage, retrieval, and distribution system for electric scooters.