ANI Technologies-owned Ola is in talks with India’s top auto makers to procure custom-made electric and connected vehicles as the ride-hailing platform plots an aggressive expansion into eco-friendly modes of transport.
These so-named “Special Purpose Vehicles" would, to some extent, be designed by Ola, three people aware of the plans said, seeking anonymity.
The talks are also focused on efficient battery management systems that are key to operating such vehicles, especially on a mass scale, the people said.
Ola wants to replicate China’s top cab-hailing platform, Didi Chuxing Technology Co., which has tied up with companies such as Volkswagen AG for custom-made vehicles.
“Ola’s decision makes sense since developing vehicles is not its core ability," said Puneet Gupta, associate director of vehicle sales forecasting at researcher IHS Markit. “It should rather focus on getting electric vehicles and operating them in different parts of the company. So, it is better to buy the vehicles, which will be designed for Ola’s applications."
Ola has been planning a partial shift to electric mobility once such vehicles become more affordable and efficient for operations. The Bengaluru-based startup first ventured into the electric mobility space when it used electric cars of Mahindra and Mahindra Ltd in Nagpur, but the venture failed to grow in scale due to issues such as vehicle endurance and quality.
This time, SoftBank-backed Ola wants auto makers to make vehicles with features suited for its needs, instead of simply ordering cars off-the-shelf, said the first of the three people cited earlier.
“The electric vehicles that Ola is planning to acquire will be low-cost and the number of features available will also be limited. The vehicles will be developed keeping in mind the needs of shared mobility. Though this is not at an advanced level, the company is in talks with different manufacturers," the person said, adding that “the recent round of fundraising also points towards the elaborate plans the startup has in the electric mobility space".
The Bhavish Aggarwal-led startup wants to operate a range of electric vehicles in different segments in the future to expand beyond offering only cab services.
On 1 March, Ola said its electric mobility business arm, Ola Electric Mobility, had raised ₹400 crore from US-based hedge fund Tiger Global and Matrix India. This was Ola’s first external fundraise for its electric mobility business.
The company already has a plan to bring one million electric vehicles on Indian roads by 2022. The electric vehicles Ola is looking to buy are in the three-wheeler as well as four-wheeler segments.
Companies such as Mahindra and Bajaj Auto have either launched or are expected to launch electric three-wheelers by 2020. Under the second phase of the Faster Adoption of Hybrid and Electric vehicles (FAME) scheme, the Union government intends to offer a subsidy to commercial fleet operators for buying electric vehicles.
The central government will subsidize the purchase of 35,000 four-wheelers with an outlay of ₹525 crore, and 500,000 three-wheelers with ₹2,500 crore, under the scheme.
“Initially Ola planned to develop electric vehicles in-house, but now they are talking to a number of vehicle manufacturers for making specific electric vehicles, which will be used for certain applications," said the second person cited earlier. “This makes sense since the government also is keen to promote electric vehicles in commercial fleet services and Ola already operates both three- and four-wheeler vehicles in India."
"We do not comment on market speculation" - said a spokesperson of Ola in response to an email query sent on Wednesday.