Ola plans e-rickshaws, revives talks with original equipment manufacturers

Ola, the online ride-hailing major, is in conversation with three original equipment manufacturers  (OEMs) for autorickshaws. The idea is to produce electrically-powered rickshaws and sell a majority of these to it, three independent sources said. 

This is the second phase of talks by the Bengaluru-based company. In 2018, Ola had spoken to all major autorickshaw OEMs in this regard. These talks, however, did not progress and went into cold storage.

“Bhavish (Aggarwal, founder and chief executive of Ola) has gotten back to this. He has tried international and food with variable success,” said one of the three mentioned above.  In India, he explained, Ola has ceded ground to Uber. “It is not because Uber did something innovative. Ola has been looking to get to operational break-even. It is not easy and for that, Ola had to give up on market share, by squeezing both ends of the value chain — drivers and customers.”

When asked, Ola sent an e-mailed statement: “We are committed to driving electric mobility in India and around the world. We are collaborating with the eco-system and stakeholder groups across OEMs, battery manufacturers, infrastructure and energy companies to make electric mobility mainstream, in formats that can be scalable and will address public mobility needs sustainably. With our mission to bring one million electric vehicles on Indian roads, Ola aims to provide the infrastructure to enable ‘clean kilometres travelled’ at scale.”

Ola’s e-vehicle ambition started in 2017. That was when Aggarwal, Maharashtra Chief Minister Devendra Fadnavis and Union transport minister Nitin Gadkari inaugurated an e-vehicle experiment in Gadkari’s home constituency, Nagpur. The project did not take off, but Aggarwal 

saw a possible way forward and started talking to OEMs.

“Ola wanted these manufacturers to start full-fledged lines for electric autorickshaws. The top bosses at these OEMs liked the plan but wanted to wait longer,” said another of the three people. 

One of the primary reasons was that there was no infrastructure in place, i.e charging stations and no consistent source of electric supply. Neither Ola nor the OEMs wanted to invest in this. The government wanted to wait on building this infrastructure because it did not see enough of use. 

So, Aggarwal changed focus to Foodpanda, the mobile food delivery marketplace, headquartered in Germany. Ola acquired the India business of Foodpanda. 

However, as that experiment did not go as he’d hoped, Ola turned back to electric vehicles. This time, it even raised cash for an e-vehicle division. In March, Ola raised Rs 400 crore from Matrix Venture Partners and Tiger Global, among others. This money will be invested in not both purchase of e-rickshaws and to build infrastructure. “Now, Ola has first-mover advantage, they will be able to gain a whole new segment of mobility. That is also one of the reasons it has been in constant dialogue with the government, pushing for e-mobility projects,” added one of the three mentioned earlier. 

Over the past year, Ola has announced it would generate mobility reports,  covering everything from congestion to pollution. In one such, issued in April, it claimed that in Nagpur, it had built unique technology with Indian tweaks. Ola’s in-house think tank, Ola Mobility Institute, stated that in a combination of e-rickshaws and e-cabs, it had served 350,000 customers, clocked 7.5 million clean km, saved 570,000 litres of fuel and reduced carbon dioxide emission by 1,230 tonnes since its inception. “All of this is to convince the government to take Ola’s project seriously,” said one of the three sources. Ola’s executives have made repeated trips to the NITI Aayog with this plan in mind.

The company’s plans for autorickshaws can be seen in this mobility report. “Unlike Western models, India may not easily kickstart its electric journey by deploying premium electric cars. Instead, it makes sense to focus on electrifying vehicles with the highest demand and utility in the Indian context: Two-wheelers and three-wheelers. The rickshaw is already proliferating in electric variants, suggesting it is both viable and practical. Thus, appropriate prioritisation of vehicle segments for electrification may prove to be critical to the adoption of e-mobility,” stated the report.

This is also a time when Ola’s big rival, US-based Uber, has gone for a public listing; also, the latter’s earlier focus on India seems to have gone off. Uber has not replaced its Asia-Pacific head, Amit Jain, directly but has instead farmed the charge out to the EMEA (Europe, Middle East and Africa) unit of Uber. According to sources inside Uber, things in the company have come to a pause.  And, this renewed e-vehicle interest comes at a time when reports say the Indian government wants all ride hailing companies to take their vehicles electric.

Going green
 

• In 2017, Ola had inaugurated an electric vehicle pilot in Nagpur. It, however, didn't take off
• OEMs had liked the plan but wanted to wait more because of lack of charging stations in India
• This time, Ola has raised Rs 400 cr for e-vehicle division 
• The money will be used for purchasing e-rickshaws and build infrastructure