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Ola wants to do a Tesla, affordably – Mint

Bengaluru: On around 500 acres in Tamil Nadu’s Krishnagiri district, Ola Electric Mobility Pvt Ltd is building what it calls a ‘Future Factory’, which when fully ready will produce 10 million e-scooters annually, making it the largest two-wheeler maker globally.

Given that the land – 260 acres for the plant and 240 acres for two supplier parks – is still in excavation mode, the Bengaluru-headquartered firm has a somewhat audacious plan to start production in the first phase, as early as June. The first phase itself will produce 2 million units, which will be retailed in India and exported.

To put in context, market leader Hero MotoCorp produces around 6.5 million two-wheelers annually and roughly 22-25 million traditional two-wheelers with internal combustion engines are sold in India every year.

SoftBank-backed unicorn Ola Electric, which was set up in 2017, is the electric vehicle (EV) arm of transportation platform Ola (ANI Technologies Pvt Ltd). Its project, which will see an investment of 2400 crore, has taken off at a time when Elon Musk-led Tesla Inc. is set to make its India entry and the government is trying to boost manufacturing of EVs, batteries and other components.

As Ola transitions from a ride-hailing fleet management to manufacturing and retailing of EVs, chairman and group CEO Bhavish Aggarwal is clear that he is building an engineering and technology company, which will be a full-stack manufacturer of electric two-wheelers. While Ola Electric will start with scooters, it will also build separate plants for motor bikes and four-wheelers.

“Most companies buildings EVs in India are not at scale. We believe we are building products which consumers will aspire for and will be built on principles of sustainability, automation and efficiency. The concept is of a mega factory which will be the world’s largest two-wheeler factory, not just in electric,” Aggarwal said in an hour-long presentation at Ola’s Krishnagiri site on Friday.

The integrated manufacturing plant will have 10 assembly lines, use 3000 robots and around 10,000 workers. Each e-scooter will have 2 removable banana-shaped batteries and the company is building a charging network. It will initially import lithium ion battery cells for the battery packs, but is actively exploring setting up a cell manufacturing unit with a technology partner.

In May 2020, Ola Electric had acquired Amsterdam-based electric scooter startup Etergo BV. Last year, Ola hired former General Motors veteran Jose Pinheiro as head of global manufacturing and operations and Julien Geffard as the director of Go-To-Market Strategy to lead its European operations for its electric business. The appointments came after a number of senior-level exits in Ola Electric.

Agarwal said while Tesla is obviously leading innovation in the EV space, companies like Tesla and Nio in China are focused on the premium or luxury market.

“Urban mobility vehicles like two, three and four wheelers, hatchbacks, small and mid-sized sedans –that’s the meat of the market. It’s a unique opportunity for us and we are starting with the quintessential Indian urban mobility product – scooters within the two-wheeler segment, but we have programs in motion for motorbikes, four-wheelers,” he said.

While Ola didn’t disclose the price of the scooters, it said they will be competitively and affordably priced. Earlier reports had suggested they will be priced below one lakh.

Ola Electric will also use a ‘wire bonding’ technique so the different (battery) cells are bonded using wires, something which Tesla uses as well.

The success of its electric business, starting with the scooter factory, is crucial for Ola, whose core ride-hailing business was significantly impacted due to the pandemic just like rival Uber. In May, Ola had fired 1,400 people as the demand for shared mobility services dried up following the lockdown.

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