After the decline in its business due to the coronavirus pandemic, Ola has started moving towards a new sector- manufacturing.
As it has signed a Memorandum of Understanding with the Government of Tamil Nadu, Ola announced its setup of the “world’s largest scooter manufacturing facility”. The company said that it would invest Rs. 2,400 crore in the factory, which has a capacity to manufacture 2 million electric vehicles initially. Apart from this, Ola also claims that almost 10,000 jobs will be created by the factory.
Here’s what Bhavish Aggarwal, CEO of Ola has got to say:
“We are excited to announce our plans to set up the world’s largest scooter factory. This is a significant milestone for Ola and a proud moment for our country as we rapidly progress towards realizing our vision of moving the world to sustainable mobility solutions across shared and owned mobility. This will be one of the most advanced manufacturing facilities in the world. This factory will showcase India’s skill and talent to produce world-class products that will cater to global markets.”
It is noteworthy that this is not the first time that Ola has trifled with electric vehicles. Back in 2017, an electric charging station was set up by the company in Nagpur. It powered 200 Ola-owned rickshaws, buses, and cars that ran on electricity. Though this was considered to be the pioneer for many such launches, it hasn’t been materialized.
The company is betting on electric scooter manufacturing now. The groundwork for this project has been going on for a while, considering that the previous year, it acquired Amsterdam-based scooter manufacturer, Ergo. The company is known for its production of scooters that use switchable high energy batteries and have a range of 240 km.
Ola plans to produce a replica of a similar kind of vehicle but in the Tamil Nadu facility. Since the company has an important investment in Vogo, a scooter rental startup, it could use the newly manufactured scooters to boost the agile.
With India already having a homegrown company for manufacturing electric scooters called Ather, Ola will also join in the battlefield. We can hope that it will produce an electric scooter model that would not just be popular but also financially viable. The company’s roots, turning into a scooter manufacturing company from a ride-hailing platform would not be a cakewalk. However, as Ola’s ride-hailing business is likely to stay daft as more people work from home, the company is out looking to dodge the challenges with the zealous manufacturing role.
Why has Ola jumped into e-scooter manufacturing?
The electric two-wheeler market in India is increasing due to the reasons like:
Increased government policies that support electric vehicles
Awareness toward the environment
Increase in petrol prices and so on.
The Indian government has taken many initiatives to power up the sales of electric vehicles. After the launch of ‘National Electric Mobility Mission Plan 2020’ in 2013, which aims to increase the manufacturing and adoption of electric vehicles in India, electric two-wheelers are the ones that have availed incentives from 90% of the vehicles.
Another important reason for the growth and contribution of Electric Vehicles such as motorcycles and two-wheelers are due to the awareness of greenhouse gas emissions and environmental pollution.
The electric two-wheeler market in India is projected to have growth at a CAGR of around 44% from 2019-2025.
By following the “Make in India” initiative and due to the ride of many startups, the government has targeted to go 90% electrical by the year 2025. Battery-powered motorcycles and scooters are what are leading the e-revolution in India. By the year 2020, the sale of e scooters is projected to cross 2 million.
As a concluding thought, after Ola, we are sure that many other businesses would start with the E scooter app development if not manufacturing the e scooter. Though this has not gained traction yet, the revolution that these electric scooters are going to bring is huge and that can be seen with the projected market growth.
Know how Ola has set its foot on the e scooter manufacturing
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