(Bloomberg) – Bhavish Aggarwal examines the 500-acre empty stretch surrounded by neon-painted houses, small shrines and mango trees. Ola’s renowned founder hopes to build the world’s largest electric scooter factory on this empty lot outside Bangalore for the next 12 weeks, generating about 2 million a year – a milestone for one of India’s biggest startups.
A two-and-a-half-hour drive southeast of Bangalore, Aggarwal’s imagined $ 330 million megafactory marks a bold foray into unfamiliar territory for a businessman who spent 10 years building a seductive giant. His successor Ola Electric is entering an electric vehicle market already crowded by Tesla Inc. names to China Nio Inc. – albeit initially with a humble two-wheeler – but which could play in a $ 200 domestic electric vehicle industry. billion in a decade.
If everything goes according to plan, your Ola Electric Mobility Pvt expects to make 10 million vehicles annually or 15% of the world’s e-scooters by the summer of 2022, starting with overseas sales later this year. That would be a scooter being launched every two seconds after the factory expansion next year. It is the first step in Aggarwal’s goal of eventually assembling a complete line of electric cars in a boost to Prime Minister Narendra Modi’s Make in India and ambitions for sustainable mobility.
“It is a vehicle that we designed on a grassroots basis so that India can get a seat at the global EV table,” the 35-year-old said in an interview last week. Indian companies “have the intelligence and energy to jump into the future of EV”.
Aggarwal is entering the market as the main hitchhiking business slows down during the pandemic. Smoke-spewing scooters and motorcycles remain the most popular form of transportation in India’s infamous smoggy cities, 21 of which are ranked among the 30 most polluted urban centers in the world in 2019. But the country is now promoting electric vehicles and battery self-sufficiency. technologies that could, according to the think-tank CEEW Center for Energy Finance, sustain a $ 206 billion EV market in 10 years.
This will not be easy. Middle-class Indians worry about air quality, but are reluctant – at current rates – to pay twice the price of an ordinary scooter for an electric version. Aggarwal will also have to defend itself not only from local rivals Hero MotoCorp and Bajaj Auto, but also from promising companies like Ather Energy and Chinese brands, including Niu Technologies.
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The businessman is inspired by companies like Tesla, Nio and Xpeng Inc., which have outperformed the automotive giants with increasingly cheaper batteries and over-the-air software features, but he is taking a different turn. He wants to sell two-, three- and four-wheel vehicles accessible for city tours. “Our ambition is to build the world’s leading urban mobility EV company,” he said.
Ola Electric is Aggarwal’s second act. A decade ago, he pioneered hitchhiking in the country and hired Uber Technologies Inc., expanding to 200 cities before heading to the UK, Australia and New Zealand. Its startup EV was incorporated in 2017 and became a billion dollar company, or unicorn, two years later, when SoftBank Group Corp. and Tiger Global Management have disbursed hundreds of millions. It was the second time for the global investor pair, although Aggarwal struggled to keep control of Ola.
This time, he is even more firmly in the driver’s seat. He also secured the capital of Hyundai Motor Co. and Kia Motors Corp. and recently won more sponsors whose names he declined to reveal.
“We are very well capitalized and the interest of investors is unprecedented,” said Aggarwal.
Aggarwal, who often stops to ask “What do you think?”, Wants to present five two-wheeler models from the start, including mass market, premium and self-balancing versions. Even more boldly, he wants to put the first electric cars on Indian roads in 18 to 24 months. He talks about selling autonomous and futuristic four-wheel vehicles that don’t look like cars.
Read more: The next big wave of Tech Unicorn listings may be in India. On this particular Thursday, he shot a stylish scooter prototype in the office park in the Koramangala neighborhood, the epicenter of Bangalore’s opening scene. It featured new lighting, removable batteries and a large storage chest. His plan is to sell scooters digitally and also through dealerships, offering monthly payment plans to make it easier for buyers.
Electric vehicles now account for less than 1% of all automobiles sold, estimates the consultancy KPMG and the Confederation of Indian Industry. In India, battery-powered scooters can account for between a quarter and 35% of the two-wheel market by 2030, and three-wheel vehicles – popular locally – 65% to 75% so far. Vehicle accessibility may be the key to breaking the Indian market, and it boils down to the cost of running per kilometer. Aggarwal has not yet revealed the prices, but said his product will compete with traditional scooters for around $ 1,000 each. “We are going to cut costs by playing on a large scale.”
To keep costs under control, Ola is designing, designing and manufacturing its own battery, engine, vehicle computer and software. Like Tesla, it wants to keep costs low by building its own energy cells. He is testing charging solutions and battery exchange stations. Last year, it acquired Etergo BV, a smart scooter startup based in Amsterdam, to start its own scooter manufacturing.
The Ola factory site will have more than 3,000 robots working alongside 10,000 workers. The software developed by its team of 1,000 members – mostly engineers – will share the work. The factory roof will be covered with solar panels and negative carbon. Two supplier parks at each end of the complex will make about half of the components needed for the scooter. Aggarwal supervises everything scrupulously. Once a week, he walks around the construction site to check progress. On other days, cameras mounted on high pipes around the site transmit the action directly to your table. His pride is evident: a graduate of the elite Indian Institute of Technology, he said he designed the automated storage, retrieval and delivery system for electric scooters and won a patent for it.
“It has to be useful sometime, right?” he said about his education, using the popular Hindi phrase “kahin toh kaam aana chahiye na”.
End of India’s honeymoon: fully charged
(Updates with the fifth paragraph EV market analysis)
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