Mobility services provider Ola on Monday said it’ll found out its first electric vehicle (EV) factory in Tamil Nadu and can invest ₹2,400 crores to power its new business vertical that aims to sell green vehicle technologies in India and other markets worldwide.
The plant will create around 10,000 jobs, the corporate said.
“This may be a significant milestone for Ola and a proud moment for our country as we rapidly progress towards realizing our vision of moving the planet to sustainable mobility solutions across shared and owned mobility. this may be one among the foremost advanced manufacturing facilities within the world,” Bhavish Aggarwal, chairman and group chief military officer, Ola, said during a statement.
The ride-hailing company is betting big on its well-funded EV arm that aims to roll out its scooters in India, Australia, Netherlands, New Zealand, among other places, by the primary quarter of 2021.
Ola’s entry into the EV segment comes at a time when the car sector in India is taking rapid strides towards green technologies and sustainable transport solutions to curb the menace of pollution.
Ola’s factory also will cater to markets in Europe, Asia and Latin America, among others, the corporate said. The manufacturing facility is going to be completed in around 18 months and aims to sell around a million vehicles in its first year, consistent with company executives.
The company has ramped up hiring for its new business, including roping generally Motors veteran Jose Pinheiro to steer the EV vertical and Julien Geffard to go its business in Europe. the corporate plans to double its current headcount of around 2,000 people in its EV arm that would potentially make it the most important vertical within the Bengaluru-headquartered company.
Ola is additionally in talks with Karnataka to line up the plant within the state, officials said.
India’s EV segment accounts for fewer than 1% of total vehicle sales of which two-wheelers account for 5,00,000 vehicles, consistent with the Society of Manufacturers of Electrical Vehicles (SMEV). Of the entire two-wheelers sold in India, low-speed variants or vehicles which will travel but 25 kmph account for 90% that leaves an outsized marketplace for scooters with higher specifications for Ola to tap.
The segment has generated significant interest from large players like Hero and startups like Ather, Electrotherm, Avon, Lohia, Ampere, among others.
Ola plans to tap the expertise of Dutch electric two-wheeler maker Etergo BV that it acquired in May for its entry into EV manufacturing and had raised $250 million from Japan’s Softbank in July 2019 at a valuation of over $1 billion.
An October 2020 report by KPMG-CII (Confederation of Indian Industries) estimates that EV penetration (as a percentage of gasoline vehicles) are going to be as high as 30% within the next 10 years. Two-wheeler shared mobility startups like Bounce and Vogo among others also are watching converting a minimum of half their existing fleets into EVs by the top of next year.
Though Ola plans to roll out its scooters first, company executives say that they’re going to venture into other categories of two, three and even four-wheelers eventually.
“We want to possess a product altogether EV categories,” a senior official at the corporate said, requesting to not be named.