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Business News/ Auto News / Ola makes its cheapest e-scooter cheaper to boost bookings ahead of IPO
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Ola makes its cheapest e-scooter cheaper to boost bookings ahead of IPO

The price cut of ₹10,000, a 12.5% reduction from the original ₹80,000, brings the ex-showroom price down to ₹70,000

The company says it will begin deliveries of the scooter in a phased manner starting next week. (Bloomberg)Premium
The company says it will begin deliveries of the scooter in a phased manner starting next week. (Bloomberg)

NEW DELHI:In an aggressive move to boost market share and strengthen its financial footing ahead of its initial public offering (IPO), Ola Electric has substantially reduced the price of its new S1X scooter, powered by a 2kWh battery, which it had announced in February.

The price cut of 10,000, a 12.5% reduction from the original 80,000, brings the ex-showroom cost down to 70,000. The company said it will begin deliveries of the scooter in a phased manner, starting next week.

This variant of the Ola S1X with the small 2kWh battery, its cheapest offering, was delayed as the company prioritized delivering its larger counterparts first. The pricing adjustment is aimed at increasing the affordability of Ola's electric scooters as it intensifies efforts to consolidate its leadership in India's highly-competitive e-two-wheeler market, even as sales of the scooters are likely to drop following a government decision to reduce demand incentives on the vehicles, beginning this month.

As the Bhavish Aggarwal-led company prepares for a landmark IPO—the first in India's electric vehicle space—it is also nearing the final stages of securing commitments from major investors. Mint had reported that Singapore-based Eastspring and UK-based Pictet are among those interested in becoming anchor investors. Ola Electric's pitch includes its advanced battery technology, notably the '4680' form factor batteries, which promise longer ranges and faster charging times.

Market analysts point out that while the EV industry is poised for significant growth, its path to profitability remains challenging. The timely fundraise through the IPO is viewed as crucial for Ola to maintain its competitive edge and capital structure, especially as traditional automakers also increase their presence in the EV sector. Its rival Ather Energy has also launched a new scooter, Rizta, in the family scooter segment, at a starting price of 1.10 lakh, ex-showroom.

Ola Electric plans to raise 5,500 crore by selling new shares, seeking a valuation of around $6 billion, a notable increase from its last valuation of $5.4 billion in October. The public offering will include a sale of up to 47.4 million shares by founder Aggarwal, with only 10% of the IPO reserved for retail investors.

The move to localize production of critical components through its Ola Cell Technologies division aligns with India's EV policies, which favour manufacturers that invest in local production. The upcoming IPO proceeds are earmarked for significant expansions, including boosting the production capacity of its Ola Gigafactory in Krishnagiri, Tamil Nadu. The first phase of this factory was expected to be operational by March 2024, with a capacity of 1.4 GWh, ramping up to 5 GWh by October 2024.

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ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies.
Catch all the Auto News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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Published: 15 Apr 2024, 07:56 PM IST
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