Ola Electric Mobility, the electric vehicle arm of ride-hailing giant Ola Cabs and the latest member of India’s unicorn club, plans to raise more funds to support its ambition of operating one million electric vehicles by 2021.
The company plans to tap more investors to achieve the milestone, said Anand Shah, co-founder of Ola Electric and senior VP of Ola Cabs.
“We have the resources and we need to meet our next milestones now. However, as we increase the scale, we will require more capital. We definitely don’t have the resources we need to get through a million (electric) vehicles. It is a work-in-progress and we will look for capital as we need it and the purposes we need it for," Shah said in a phone interview on Monday. Ola Electric has raised about $250 million from Japan’s SoftBank Group to join the coveted unicorn club of startups valued at more than $1 billion, according to filings with the Registrar of Companies.
He, however, did not disclose the quantum of funds the company wants to raise.
The company aims to build a fleet of at least 10,000 EVs in FY20 comprising largely e-rickshaws and electric auto-rickshaws. “Our efforts are focused on getting the right business model in place to get to the first milestone," Shah said.
On a larger scale, the fleet operator is working on fundamentals to ensure that deployment of one million EVs, primarily across two- and three-wheeler segments, is viable and sustainable.
Ola Electric is working on the EV business model involving the price of EV without battery, financing of batteries and vehicles, driver identification, as well as the charging network, said Shah. “A lot of our energy is being spent on figuring out how to co-create the infrastructure to keep up with the scale that we intend to deploy," he said.
“EVs need to be TCO (total cost of operations) optimized for their lifetime, which will include costs on multiple fronts such as energy, battery and critical parts. This is where the OEMs (original equipment manufacturers) are working on," he said.
Notably, Ola Electric is working on a unique business model, which involves making EVs ultra-affordable by taking out the batteries, which account for almost 40% of the total cost. Under the said model, it plans to aggregate EVs without batteries from OEMs and help battery vendors supply battery and set up charging ecosystem.
“This is one of our key experiments. It is about how to make an EV ultra-affordable by taking out the battery and if we can deploy the battery ecosystem as a service. This will involve making payment for every battery swap and will have affordable energy costs, and that we do this with reasonable (network) density to inspire confidence in the market," Shah said. Ola Electric is conducting pilot projects involving “a few hundred".
EVs on this model in the Delhi-national capital region and Nagpur. It is also running a pilot in Bengaluru on battery swap model on electric two-wheelers.
The company had earlier run a pilot project on EVs in Nagpur, which reportedly failed.
“The purpose of the Nagpur pilot was to learn something that no one had answers to as nobody knew the operating economics of the EVs then. It taught us a lot. We are doubling down on what we learnt from Nagpur," Shah said.
On the government’s proposal mandating cab aggregators to convert 40% of their fleet to EVs by 2026, Shah said, “I think there should be more engagement between the government and the industry or the companies that will be involved in this transition. We continue to go electric as quickly and as viably as possible. We believe that it is encouraging that the government would like electrification to happen but it is not clear how the government intends to help companies achieve that target. At the moment if you tell me to convert 2.5% by fleet into electric, it is not viable." Ola Cabs, which raised $300 million from Hyundai Motor Group and Kia Motors in March, is increasing the workforce to expand work on battery engineering. The company is learnt to be developing its own battery capabilities and is keen to set up its own network of swap stations to power its growing EV fleet in the run up to 2021.