Billionaire Pawan Munjal, chairman of Hero MotoCorp Ltd, the country's largest two-wheeler maker, is in advanced discussions to invest in Ola Electric Mobility (Ola Electric), the ride-hailing firm’s electric vehicle arm, according to sources.
“Conversations are going on between Munjal and Ola for the investment. He is expected to bring a lot of strategic value to Ola Electric,” said a person familiar with the talks. However, the amount of money has not been decided yet.
Experts say that Ola is wooing a lot of top industry veterans whose business experience of building global businesses and deep understanding of emerging markets and opportunities will be valuable to Ola Electric in executing their plans. The strategy is also expected to help Ola compete with rival Uber.
For instance, in May this year, Ratan Tata, chairman emeritus of Tata Sons, invested an undisclosed sum in Ola Electric as part of a Series A round of funding. Tata is also an early investor in Ola’s parent company ANI Technologies. The same month, Ola Electric appointed Arun Sarin, former CEO of British telecom giant Vodafone Group Plc, as an independent director on its board. Sarin also serves on the boards of Cisco Systems, Accenture, Charles Schwab and ANI Technologies.
Ola Electric is currently running several pilots involving charging solutions, battery swapping stations, and deploying vehicles across two, three and four-wheeler segments. Munjal’s investment would come at a time when the finance minister Nirmala Sitharaman made a slew of announcements during the budget presentation in July to turbocharge the fledgling electric vehicles (EV) industry. Sitharaman said during her budget presentation that the goods and services tax (GST) on EV will be reduced from 12 per cent to 5 per cent and the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs. The government has also committed Rs 10,000 crore on FAME 2 (Faster adoption and manufacturing of hybrid and electric vehicles) which is expected to invigorate the EV industry.
In July, Ola Electric also raised $250 million from Masayoshi Son’s SoftBank, according to regulatory documents. The investment had made the company a “unicorn”, or a start-up valued at more than $1 billion, according to sources. In March this year, Hyundai Motor Company (Hyundai) and Kia Motors Corporation (Kia) said they will invest $300 million in Bengaluru-based Ola. The agreement will see the three companies extensively collaborate towards developing unique fleet and mobility solutions, building India-specific electric vehicles and infrastructure.