Ola, India’s largest ride-hailing company, plans to have one million EVs on the roads by 2022. With recent investment of $250 million from SoftBank added to a series of successful funding rounds, Ola has become the first EV startup to gain “unicorn” status in India, meaning it is valued at over $1 billion.
The company’s recent financing not only puts it in the lead over its main competitor, Uber, it also puts it in a good position to meet the company’s goal of converting 40% of its fleet to electric vehicles by April 2026. The ambitious target comes via a planned policy change from the Indian government as part of its new agenda for clean mobility, as was reported by Reuters. Ride-hailing services must meet goals of 2.5% electrification by 2021, 5% by 2022, 10% by 2023, before finally hitting 40% in 2026.
Ola has been running several EV pilots in India for a few years already, and with the founding of Ola Electric, it is ready to take on the next steps of electrification. To learn more about the company’s mission, we spoke with Anand Shah, Co-Founder of Ola Electric Mobility and SVP Ola.
What was the initial inspiration for founding Ola Electric Mobility (OEM)?
With the Nagpur EV pilot, Ola has been an early evangelist for eco-friendly mobility options. We see this in the long view: there is a lot of innovation on products, charging solutions, business models, and financing that needs to happen if we are going to make cleaner mobility as practical as current solutions for driver partners or large fleets.
Ola Electric was founded to figure this out. We have a vantage point that is deep into many of these issues for traditional mobility, and believe we have a unique ability to bring the pieces together to make electric mobility market viable at significant scale.
How much of your fleet is currently electric?
Currently, we are running various pilots across the country including Nagpur and Gurgaon. So far, we have over a thousand EVs in our fleet. We are actively expanding this to meet our goal to roll out 10,000 electric three-wheelers and two-wheelers by the end of the current financial year.
What specific plans do you have to reach the target to convert 40% of the fleet to electric by 2026?
Charging infrastructure and lower cost batteries are critical to making any significant dent in fleet composition for any company. Market-based businesses need electric vehicles to be competitive with alternatives. We are focused on charging solutions and innovations that can limit the need to over-spec vehicles and/or address inconveniences of charging that limit the earning potential of our driver partners. If electric vehicles can improve outcomes for customers, drivers, and the environment, fleets will start converting without outside pressure.
Currently, our focus is on business models to deploy batteries as a service and distributed charging solutions for electric two and three-wheelers. We believe small vehicles have the greatest promise to compete with ICE counterparts in the near term.
We will continue introducing EVs across India, working with like-minded partners, and remain committed to bringing 1 million electric vehicles on Indian roads by 2022.
Ola has recently become the first EV business in India to attain “unicorn” status as a company. How do you plan to make use of these funds?
Ola Electric Mobility is intensively focused on solving the technical and business model challenges of making charging and battery-swapping solutions reliable enough to boost vehicle electrification in India. Our Nagpur pilot indicated that battery swapping is a promising charging mechanism for Indian use conditions. Equipped with the learning of the Nagpur pilot we are already running several other pilots in the country and work towards a sustainable business model that accelerates the pace of EV adoption in India. We have also released a report named “Beyond Nagpur” encapsulating the learnings of the Nagpur pilot. The report can be downloaded from here.
What sets Ola apart and how does it differ from other ride hailing-platforms, such as Uber?
Ola has always been strong at solving unique problems that limit the scale of the mobility revolution. With a relentless focus on helping our driver partners and customers meet their needs, we have built strong propositions in adjacent sectors including fleet operations, financial services, skill development, food delivery, rental solutions, etc..
Ola has had a unique position to be an early mover in the electrification of the mobility ecosystem in India. Our technology capabilities, ecosystem strengths, and scale have helped establish us as a strong force for electrifying vehicles as a routine part of that ecosystem.
Which VCs or companies have invested in Ola Electric Mobility?
Enabling our focus for providing economic and sustainable mobility solutions, we have received investment from some of Ola’s earliest investors such as Tiger Global, Matrix India, strong support from SoftBank, as well as legendary business icons like Mr. Ratan Tata and Mr. Arun Sarin.
How many users do you currently have?
Ola has delivered almost 10 million electric kilometers through its pilot programs. We are focused on developing solutions to dramatically scale while creating value for commuters, driver-partners and the larger ecosystem.
How do you envision urban mobility changing in India in the coming years?
Around the world there is growing pressure to relieve congestion, improve air quality, and reduce dependency on limited fossil fuels. For India, with huge momentum behind renewable energy solutions and an economic imperative to reduce dependence on oil imports, electrification is a logical area of focus. Shared electric vehicles help address many challenges by making better use of assets, storing and using renewable energy, and eliminating the greatest source of air pollution in most cities.
Cities in India are growing fast, and policymakers have committed to strengthening mobility solutions in both large and upcoming cities. We expect increased emphasis on public transit, shared and pooled mobility, mobility-as-a-service, and first and last mile mobility and logistics.
New urban solutions will also lead to the development of new skills, new thinking, new business models, and will open doors for employment and economic opportunity. India is urbanizing at a time where technology and innovation well help build adaptive, smarter, and cleaner cities of the future.