Price hikes in electric scooter models? 'Unlikely', says Ola Electric

Ola Electric has ruled out any increase in the price of its electric scooter (e-scooter) models because of implementaion of the new more stiffer saftey norms for electric vehicles.  It called such a move ‘unlikely’.

The government has extended the earlier October 1 deadline for the implementation of new battery testing norms for electric vehicles (EVs).

OLA IS IN variance with some EV and lithium ion (Li-ion) battery makers who have said this could lead to an increase in costs by 10 per cent or more.  

Arun Kumar GR , chief financial officer, Ola said: “There will hardly be any increase in costs for us. We use value engineering to tackle cost increases, if any.”  

On whether price would increase because of additional safety investments, Kumar said: ‘It is unlikely. Tough luck for those undercutting customers. We sell a high-quality product. It is a natural progression of value engineering and is a few bricks in the evolution structure.”

Kumar said cost increases have to be seen from the prism of the investment cycle. “We invest in technology because we work on advanced software and write our own codes. For a low-cost Chinese player or one doing assembly work by importing components from there, perhaps costs could escalate.”

Asked whether companies would face the problem of liquidating inventory, he said: “The inventory problem is for internal combustion engine vehicles and not for EVs. In EVs, no one keeps a large inventory of battery packs. Their cell performance deteriorates after 180 days.”

The company has been doing wire bonding as part of the safety toolkit and is working on thermal propagation. It simply means if one cell is defective and catches fire, it will not spread to the rest.

The company has already developed a solution for it and is ready for homologation. As battery lines are automated, they will require some tweaks to ensure traceability of cells.  

But Kumar said that costs and quality have become inversely proportionate — a major worry for customers choosing new technology.

“If companies import battery management systems from China, buy cheap cells, unaware of the electronics used, have someone else write their software and code is not available to them, the whole product ecosystem goes out of whack,” he said.

Kumar said the government has thankfully been scouting for best safety and quality standards and the Indian requirements are comparable — if not tougher — with the European standards, especially in areas like thermal propagation.