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Ola to invest  ₹24 Billion for world’s largest e-scooter factory

Ola to invest ₹24 Billion for world’s largest e-scooter factory

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Upon completion, the factory will create almost 10,000 jobs and will initially have an annual capacity of 2 million units

Six months after it acquired the Dutch start-up Etergo B.V., Ola Electric has announced a Rs 2,400-crore ($320 million) investment plan to set up, what it calls, the ‘world’s largest’ electric scooter (e-scooter) manufacturing plant in Hosur, Tamil Nadu (TN).

The SoftBank-backed firm aims to make India a manufacturing hub for electric vehicles (EVs). Ola has signed a memorandum of understanding with the TN government for this facility.

Upon completion, the factory will create almost 10,000 jobs. It will initially have an annual capacity of 2 million units.

“We are excited to announce our plans to set up the world’s largest scooter factory,” said Bhavish Aggarwal, chairman and group chief executive officer, Ola. He said the factory would be one of the most advanced manufacturing facilities in the world. It would showcase India’s skill and talent to produce world-class products that would cater to global markets.

“This is a significant milestone for Ola and a proud moment for our country as we rapidly progress towards realising our vision of moving to sustainable mobility solutions across shared and owned mobility,” said Aggarwal.

Ola’s factory will serve customers not only in India but in markets the world over, including Europe, Asia, and Latin America.

The company is raring to launch the first of its range of highly anticipated e-scooters in the coming months. The new manufacturing plant will help take mobility into a more sustainable, accessible, and connected future.

The move has placed Ola in direct competition with legacy electric two-wheeler makers, such as Ather Energy, Hero Electric, and TVS Motor Company.

Last year, Ola Electric had raised $250 million from Masayoshi Son’s SoftBank. The investment turned the e-vehicle arm of the ride-hailing aggregator into a unicorn, or a start-up valued at more than $1 billion.

The company said that in line with Prime Minister Narendra Modi’s vision, Ola’s factory was an important step in making India ‘atmanirbhar’. It would catalyse the reduction of India’s import dependence in a key future sector like EVs, boost local manufacturing, create jobs, and improve technical expertise in the country.

According to Ola, the factory will also galvanise India’s EV ecosystem and establish the country as a key player in the EV manufacturing space.

India, with its unique skill-sets, manpower, and demography is well placed to be a global hub for cutting-edge manufacturing of EVs.

The factory will produce Ola’s upcoming line of two-wheelers, starting with Ola’s e-scooter. It features many firsts, including seamless design and a unique removable banana battery that is easy to carry and can be charged anywhere. It is also equipped with intelligent software that elevates the entire consumer experience of owning a scooter. Ola plans to bring many such design and software innovations to its entire two-wheeler product portfolio.

Ola, which was last valued at $6 billion, is betting big on its EV business. This is at a time when the Covid-19 pandemic continues to batter the ride-hailing industry.

In May, Ola laid off 1,400 employees or over 33 per cent of its workforce due to the pandemic. Aggarwal had recently said that Covid-19 had forced everybody to “rethink future plans and business models”.

This year, Ola revealed plans to hire over 2,000 people for its electric business, as it rapidly builds a suite of electric and smart urban mobility solutions for consumers around the world.

Ola Electric Mobility (Ola Electric), the ride-hailing firm’s EV arm, acquired Etergo B.V., an Amsterdam-based e-scooter original equipment manufacturer. Recently, the company brought on board General Motors veteran Jose Pinheiro to head its global manufacturing and operations.

The firm recently appointed mobility industry executive Julien Geffard as director of the go-to-market strategy for its electric business in Europe.
The two-wheeler EV market in Europe has seen double-digit growth in 2020, with customers looking for differentiated products that are smart, stylish, lightweight, and available at competitive prices.

Ola will also bring its electric two-wheeler range of products to New Zealand. It will help support the New Zealand government’s goal of on-roading 64,000 new EVs by the end of 2021, while also helping the public sector become carbon-neutral by 2025.

Earlier, Ratan Tata-backed Ola Electric had inducted automobile industry veterans like B V R Subbu and Jaime Ardila into its board. They bring with them their deep industry expertise and global mobility experience.

The global EV industry mopped up $162.34 billion in 2019, and is estimated to reach $802.81 billion by 2027, growing at a compound annual growth rate of 22.6 per cent between 2020 and 2027, according to a report by Allied Market Research.

Source: business-standard
Anand Gupta Editor - EQ Int'l Media Network