Mainstream OEMs may be challenge for Ola e-scooter

Our Bureau Bengaluru | Updated on August 13, 2021

Set to launch on August 15, Ola Electric wants to revolutionise India’s electric vehicles (EV) market by scaling up production. However, market analysts saymainstream original equipment manufacturers (OEMs) may prove to be a challenge to Ola Electric.

Soumen Mandal, Research Analyst — IoT, Automotive & Devices Ecosystem, Counterpoint, told BusinessLine, “Mainstream OEMs like Hero, Honda, TVS, Bajaj, and Mahindra, with their market knowledge and supply chain network, can shift into EV production swiftly. This might be a challenge to Ola as these mainstream OEMs already have more than 90 per cent of the market share.”

Watch | E-Scooters: Do mainstream OEMs have an edge over new manufacturers?

High demand

Led by the rise in fuel prices and revised FAME II incentives, two-wheeler EV companies have recorded tremendous growth this year. According to Autocar India, the sale of electric two-wheelers in the first half of 2021 was greater than sales in all of 2020.

Taking cognisance of the growth in consumer demand, Hero Electric has also invested in increasing its current facilities to produce over 3 lakh bikes per year against the existing rate of 75,000 bikes per year. Commenting on Ola Electric’s entry into the EV market, Naveen Munjal, Managing Director, Hero Electric, said, “We at Hero have always said that we are happy to see competition entering this ever-growing space of EVs. As we see more and more players, whether it is legacy players or new start-ups making their foray, it will only help the industry grow and create much needed awareness for the segment and cleaner mobility solutions. It is definitely a positive thing when you see companies claiming a large number of bookings which means that the market is ripe for growth and disruption.”

Ola Electric claims to have received 1 lakh bookings for the Ola e-scooter within 24 hours of opening registrations. Further, Ola has built a 2W EV manufacturing factory called Ola Future Factory. The facility will have a production capacity of 10 million EV units at full capacity.

Charging networks

Along with these manufacturing plans, Ola Electric also plans to set up a charging network called Ola Hypercharger Network. The company claims to have set up more than 100,000 charging points across 400 cities. However, these charging points will only be accessible to Ola e-scooters.

Contrary to this, Ola Electric’s competitor, Ather Energy, has offered free charging infrastructure to boost EV adoption. Ather has set up public fast-charging points across India which can be accessed by all EVs. Earlier this week, the company also announced that it will offer its proprietary charging connector to other OEMs, sans royalty.

Expanding on this, Ravneet S. Phokela, Chief Business Officer, Ather Energy said, “the biggest challenge facing the EV industry right now, is to scale up the supply chain. Because currently there is more market demand than we have the ability to supply. Unless these challenges are solved, there is no point in us having a million capacity and Ola having a million capacity.”

He added that the supply chain is where OEMs need to focus and work with partners to build capacity. This is also where the government needs to focus to incentivize supply chain players to scale up.

Published on August 12, 2021

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