The Indian government is reportedly planning to mandate cab aggregation services to have minimum percentage of their fleet as electric cars.
Reuters recently reported, quoting unnamed government officials privy of the development, that cab aggregators like Uber and Ola Cabs could be required to have at least 40% of their fleet as electric vehicles by April 2026. These discussions are taking place at the Indian government’s policy think tank NITI Aayog, which has proposed several other measures to boost electric mobility to various miniseries in the current government.
According to the report published by Reuters, the government is expected to provide a roadmap to these companies to increase the share of electric vehicles in their fleet progressively by 2026. By 2021 the companies need to achieve 2.5% electrification of fleet, and this percentage shall increase to 5% by 2022, 10% by 2023, and 40% by 2026.
While details of the proposal are yet to come out in the public, it would be interesting to see how the government defines electrification. Would the government allow use of hybrid vehicles in the fleet as well or the electrification targets refer only to pure electric vehicles? Would the targets refer only to cars or other mode of transport as well, like electric bikes and auto-rickshaws as well?
Uber and Ola have pre-empted the government’s move and have already invested substantial efforts in moving towards electric mobility. We reported recently that Ola Electric Mobility, a subsidiary of Ola Cabs, raised an undisclosed amount of funding to boost its future plans.
The company also entered a financing agreement with Tata Motors Finance worth $5.7 million to add 1,000-1,300 units of the soon-to-be-launched electric version of the world’s cheapest car — Nano. The company is expected to launched these cars in a couple of Indian cities as a pilot project. Ola Electric plans to have 1 million electric vehicles on Indian roads by 2021.
Ola’s main competitor Uber has also entered an agreement with Mahindra Electric (competitor to Tata Motors in the electric cars segment) to launch around 50 electric hatchbacks and sedans. Uber has also entered a partnership with an electric bike sharing company in the city of Bengaluru.
This news of mandatory electrification of the fleet of cab aggregators come just days after Indian news agencies reported that the NITI Aayog has recommenced that all two and three-wheelers sold in the country after March 2025 shall be electric.