The electric mobility subsidiary of Uber’s Indian competitor Ola Cabs has just landed fresh funding from SoftBank, in the second major fundraising exercise completed by the company.
TechCrunch first reported that Ola Electric had recently raised US$250 million from SoftBank, which also holds stake in the former’s parent company, Ola Cabs. With this fresh round of funding Ola Electric is reported to have achieved unicorn status with a valuation of US$1 billion.
In the nascent EV aggregation business in India, Ola Electric has managed to create impressive credentials in a very short span of time. The company launched its first pilot project in the city of Nagpur, Maharashtra, where it now runs more than 200 vehicles. The company runs electric cabs, auto-rickshaws, buses, rooftop solar installations, charging stations, and battery swapping experiments as part of its pilot project.
Earlier this year the company also secured an undisclosed amount of funding from Ratan Tata, the chairman emeritus of Tata Group. The company also managed to build a close association with Tata Motors, a subsidiary of the Tata Group. Ola Electric has entered into a debt funding deal with Tata Motors Finance worth US$5.7 million to acquire the electric versions of world’s cheapest car — Nano — which was once built by Tata Motors. The electric version is now known as Neo and is being manufactured by Jayem Automotives.
Ola Electric is now in an excellent spot to capitalize on the Indian government’s pro-electric mobility policies. In 2018, the company announced its ambitious plan to launch 1 million electric vehicles by 2021. The Indian government has launched the Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India, or the FAME-II scheme, under which it offers financial subsidies on the purchase of electric vehicles.
At present more than 20 three- and four-wheel vehicles are eligible for financial subsidies under this scheme, including the electric Neo which is eligible for a subsidy of US$1800.
Three-wheel electric vehicles are currently the most popular public transport mode in the electric mobility market. It is, thus, very likely that Ola Electric would focus on this market segment for the time being, especially since the automobile manufacturers are yet to finalize the clear electric mobility roadmap.
Recently, the Indian minister for road transport and highways reiterated that the government is considering a ban on the sale of two- and three- wheelers powered by internal combustion engines. The government is also reportedly planning to mandate cab cab aggregators, like Uber and Ola Cabs, to have at least 40% electric vehicles in their fleet by 2026.
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