Editor: Jatan Kenia. Read Time: 7 mins.
While we have all heard of Tesla as the numero uno producer of electric cars at a global stage, there is a similar story brewing right here in India. And it is none other than Ola. Ola made its electric vehicle (EV) business an autonomous unit under the name Ola Electric and is on track to establish the world’s largest electric scooter producing factory.
Ola CEO, Mr. Bhavish Aggarwal announced that Ola Electric will launch its electric scooter on 15th August 2021 – the 75th Independence Day of India. The announcement has undoubtedly created a massive hype around the launch. And rightfully so, for this is going to be the first-ever EV produced in India, for India, and by India.
Read on to find out more about Ola Electric.
All About Ola Electric
Ola Electric was founded in 2017 by the Ola founding members namely Bhavish Aggarwal, Anand Shah, Ankit Jain, and Ankit Bhati. The company plans to build the world’s largest electric scooter factory – Ola Future Factory, in the state of Tamil Nadu. And not just that, with over 1,00,000 charging stations spread over 400 cities, they also plan on building the world’s largest network of two-wheeler charging stations
In a tweet dated back in June, Mr. Aggarwal shared the ongoing process of the factory and stated that the first phase is nearing completion! Spread over a rocky land of 500 acres, this factory will have 10 production lines and has the potential of producing one scooter every 2 seconds. That equals to a whopping 10 million scooters per year. No mean feat by any metric.
Now, let’s take a look at the project finance modeling to establish this behemoth of a manufacturing unit!
To erect this unique factory, Ola Electric stated that it would raise ₹2,400 crores. It has raised a debt of about ₹744 crores ($100 million) from the Bank of Baroda which is used in the construction of Phase 1. This makes it the largest long-term debt by an EV manufacturing company spanning over 10 years.
Ahead of its IPO, it received an infusion of $300 million from existing investors – Tata Sons, Hyundai Motors, Kia Motors, Matrix Partners, Tiger Global Management, and SoftBank and raised another $500 million from Warburg Pincus and Temasek.
Now that we have a basic idea of Ola Electric’s financial figures, let us understand it’s similarities with Tesla.
How is Ola Similar to Tesla?
1.Low Booking Price
As observed by HT Auto, the two EV-producing companies have a lot in common. The first major resemblance is the low booking price. Tesla charged just $100 as the initial booking amount for the Cybertruck and Ola too adopted a similar strategy with a booking fee of merely ₹499. This strategy has proven to be successful as it has led to over 1,00,000 bookings. Though bookings don’t always guarantee sales, it definitely keeps the product in the limelight.
Another likeness is affordability. While all of Tesla’s models don’t qualify as affordable, the Model 3 was certainly one that did and it was also very successful. Ola claims that it will provide a first of its kind electric scooter, which according to current estimated prices, will also be the cheapest in India.
Then there is the ability for mass production. Tesla has set up Giga factories that churn out cars by the millions. Ola’s Future factory too aims to produce 10 million scooters in a year with its 10 production lines.
Finally, there is the no-dealership route which Tesla adopted. It has been noticed that Ola also isn’t going to establish a private dealership network and instead deliver the models right at the customer’s doorstep.
Though HT Auto has indicated that it is too soon to make such comparisons, but from the above observations, it seems rather obvious that Ola might be India’s next Tesla. What do you think?