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Will Ola cause the next big disruption in the electric 2-wheeler market?

G Balachandar Chennai | Updated on August 30, 2021

There is still no clarity on the battery quality and its costing details, says an expert

As Ola Electric prepares to deliver its electric scooters from October, will it trigger the next big disruption in the Indian electric two-wheeler market by the hype and expectations created? Well, industry analysts are cautiously optimistic about the company’s ability to emerge as a gamer changer, at least in the initial phase.

While it unveiled its electric scooter Ola S1 on August 15 with a price (.₹99,999) matching petrol-powered bikes and scooters, it had already garnered more than one lakh pre-bookings.

Ola Electric appears to have achieved initial success with exciting specs in its scooter. But product acceptability remains to be seen. “Going by the specifications and features, the product could be disruptive as it appears to be matching the aspirations of younger groups and the higher-end segments. But there is no clarity on the battery quality and costing details. If one is required to change the battery after three years, it will cost a bomb -- ₹60,000 to ₹70,000 - going by the specs in S1 variants. We still don’t get a sense why they didn't go for the swapping option as well,” says Himani Jain, Senior Programme Lead, CEEW (Council on Energy, Environment and Water).

The company is now working on the mammoth task of fulfilling the customer orders from October. Bhavish Aggarwal, Chairman and Group CEO of Ola, announced that it would deliver its S1 scooters across 1,000+ cities from where it received pre-bookings.

“The constraints in the EV supply chain are well registered and acknowledged. Many EV components are still imported, any snag in the supply of critical components like battery cells or packs, may adversely affect the production plans. If Ola is able to fulfil the 1 lakh + bookings within reasonable time, then it’ll be a great start for the newest EV startup in India. But if Ola takes too long, then there’s a risk of cancellations, which will not only hamper sales but also dent the image of Ola as an OEM,” says Suraj Ghosh, Associate Director, Powertrain & Compliance Forecasts, South Asia, IHS Markit.

Charging infrastructure

Ola S1 comes bundled with a convenient portable home charger that just needs to be plugged into a regular socket. The company is working on building its own Hyper-charger Network.

“Ola has created huge excitement, and I am sure they must have put the delivery team in action. But adoption of high-speed electric scooters will not be so big – share will be just 3-5% of the market. The share may cross double-digit only if the product becomes successful and the charging infrastructure improves. But Ola’s launch will expand the EV ecosystem,” says Sanjeev Garg, Practice Leader-Automotive, Praxis Global Alliance.

While the EV supply chain in India is evolving, the improving customer acceptance on the back of government policies and subsidies may favour Ola.

“The electric two-wheeler market is expected to grow at an exponential pace over the medium aided by recent favourable changes in incentive which coupled with rising fuel cost has resulted in lower payback period,” says Shamsher Dewan, Group Head & Vice President - Corporate Sector Ratings, ICRA Ltd.

“In addition, introduction of new models with superior single charge mileage and host of features will drive customer attention. Finance tie-up and investments in setting up a wide distribution and charging network will play an equally important role for OEMs besides launching successful products,” he added.

The electric two-wheeler volumes grew from 24,839 units in FY20 to 40,837 in FY21. During this fiscal, more than 30,000 electric two-wheelers have already been sold to date.

Published on August 30, 2021

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