Cabs-hailing company Ola has decided to renew its push towards electric vehicles having learnt from its mistakes in an experiment in Nagpur last year. The company has now set a target of one million EVs in its fleet by 2021 — an ambitious plan considering India lacks the infrastructure and the will to make EVs mainstream.

But, Ola co-founder Bhavish Aggarwal has a history of taking audacious bets and working towards it. The best example of that being how Ola continues to lead in India despite arch rival Uber’s deep pockets, its no-holds-barred push here under previous CEO Travis Kalanick, and better technology.

Ola has just 200 electric cars and an unspecified number of electric three-wheelers in a fleet of some 450,000 cars in India today. Elsewhere in the world, China’s Didi Chuxing already has 260,000 EVs today, claiming to have the largest number of electric cars under its umbrella.

At the heart of Ola’s EV strategy are three pillars: building the infrastructure, forging partnerships for vehicles, and doubling down on three-wheelers, said a source close to the company. “Nagpur was a pilot to see how things works. It learnt from its mistakes, and has included new ways to build its EV fleet,” the source added. Ola’s Nagpur project with EVs has not lived up to expectations.

FactorDaily had reported earlier that Ola was the first company to scale back on its EV plans after the government took a U-turn by announcing that it won’t target the 2030 plan of making India an all-electric car country.

One of things it learnt in Nagpur was to focus on three-wheelers or electric auto-rickshaws, rather than electric cars. “It’s cheaper and easier to deploy. Charging is also faster,” said an Ola insider.

Ola did not respond to questions sent to its spokesperson for comment.

Cars are expensive

‘Mission Electric’ is what Aggarwal calls it. The aim is to deploy a million electric vehicles on Indian roads by 2021. “Even if its half of that, it’s a very large number of vehicles on Indian roads,” said Amit Kaushik, country head of Detroit-headquartered automotive consultancy Urban Science.

Going after taxis wasn’t the wisest thing for Ola, said the company insider. Reasons: the cost of an electric car is five times of a three-wheeler. Apart from Mahindra & Mahindra, there are no other car makers manufacturing making e-cars. Batteries of cars are expensive when it comes to replacement.

To be sure, Ola hasn’t abandoned cars altogether, but will focus on three-wheelers more. The company has already made a commitment of deploying 10,000 e-rickshaws by April 2019. “His immediate milestone is in sync with the company’s plans to bring one million EVs on the road by 2021,” said the source close to the company.

Aggarwal’s focus is in line with estimates. According to TechSci Research, a management consultancy, the electric three-wheeler market will cross $1 billion in value. Industry lobby ACMA and automotive consultancy Roland Berger estimate that 427,000 e-rickshaws were sold in 2017, a 71% jump over 2015.

Companies like Kinetic Green Energy & Power Solutions, Japan’s Terra Motors, Sweden’s Clean Motion, Lohia Auto, and Hero Electric are looking at three-wheelers to give a big boost to the EV industry. Ola is talking to most of them to buy three-wheelers.

Still, Ola may face a capacity constraint. The transition of internal combustion engine production to EV production will be slower at Bajaj Auto, the No. 2 electric three-wheeler maker, according to an ACMA-Roland Berger report. “By 2025, it is assumed that Bajaj will have 30% and Mahindra has 60% of current capacity converted for EV production.” It is also estimated that L5 category – auto-rickshaws with speed less than 50 kmph and ideal for point-to-point city transportation – will increase their capacity by 50% by 2025 and the category will have capacity of 309,000 vehicles annually: accounting for 46% of total e-rickshaw sales.

Capex vs Opex

Talking about the Nagpur pilot, Jaspal Singh, partner of Valoriser Consultants, an advisory firm on public transportation and logistics, said: “Drivers are not ready to shift from diesel vehicle to EV. Second challenge is the limited supply of cars. (Ola) experienced a lot of operational challenge.”

That is why the company shifted to autos. “There is bigger market for autos,” said Singh. “Also, the trip size is shorter and there is value in auto. In tier-2 and tier-3 cities, they can tap into the market.”

As far as electric cars are concerned, Ola is in talks with European and Chinese OEMs to procure the vehicles, said a third source. “Most of the discussions are around buying the vehicles at lower than market price,” said the source. “Many of the companies are willing to do so as India will become the test bed for EVs for global deployment.”

Ford, Nissan and BYD are some of the international companies Ola is in discussions with. “The company is also talking to OEM partners and EV innovators globally to bring vehicles on the road in a planned and phased manner,” said the first source. In India, it will buy from Mahindra & Mahindra and Tata Motors, this source said. Talks are also on to form a revenue share model – where the car manufacturer would provide the vehicle to Ola at zero cost and Ola would share a portion of the revenue with the manufacturer.

“The plan really is to work with driver-partners, cities, vehicle manufacturers, and battery companies to make sustainable technologies cost-effective and viable in daily mobility. The thought really is to leverage Ola’s scale to bring cleaner, more comfortable, and safer products to market,” the first source added.

But none of this will be possible without a robust battery and charging infrastructure.

Low-cost infrastructure

Ola is on talks with various state governments to help it with building an infrastructure policy for deployment of e-rickshaws. It wants to replicate the Nagpur plan in other parts of India. “The project includes electric cabs, electric auto rickshaws, electric buses, rooftop solar installations, charging stations, and battery swapping experiments,” said the first source.

The company is ready to take Mission Electric to the next level. According to internal numbers, Ola’s EVs have travelled over four million kilometres in the city of Nagpur. It have learnt how to effectively manage vehicles, batteries and operations.

The company plans to continue its experimentation with ways to optimise batteries and charging.

One such experiment was putting low-cost slow chargers at drivers’ homes — a pilot that has been launched in Nagpur. Already 30 such chargers have been installed. It has also put up 18 slow charging stations to charge multiple cars at the same time, in addition to its initial plans to erect fast charging stations.

“Building charging stations at drivers’ homes in interesting. The driver will not have to wait to charge the vehicles,” said a fourth person. Drivers usually go home twice in a day. Once for lunch and then at night. The vehicles get fully charged at night and a top-up charge happens during the afternoon. “While the driver goes home for lunch and take some rest he can charge the vehicle,” this source said.

The first source also said that battery swapping is emerging technology and that Ola is looking is doing a pilot on battery swapping. “It is currently deployed and is being tested for three wheelers in Nagpur to be ultimately scaled up as Mission Electric further expands to other cities,” the second source said.

“Low-cost charging stations and battery swapping are better in autos where you do smaller trips and the batteries are smaller so it can be easily swappable,” Singh, the logistics consultant, said.

In the future, if everything works well, Ola will look at creating a marketplace for electric auto drivers. “They are looking at aggregation model as well,” said the fourth source. An individual with an e-rickshaw will allowed to join Ola’s fleet, just like it happens in cars. That could help in quickly expanding the vehicle base.

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