Ride-hailing firm Ola, that has big plans for turning India into an electric vehicle nation, is now scaling back its plans for battery-powered vehicle fleet.
Ola wanted to play an important role in developing India as an EV nation, however, the government’s latest announcements have left the firm’s plans in disarray, said a Factor Daily report quoting a source close to the development. If a large number of people continue to use petrol or diesel cars and taxis, the economics of investing in EVs is not going to favour Ola, added the source.
On February 15, Nitin Gadkari, minister of road transport and highways said, “There is no need for any policy now.”
The statement was in complete contrast to the minister’s early statement when he said the policy was awaiting approval from the union cabinet.
Earlier, Gadkari had emphasised on the government’s ambitious plan to shift to electric vehicles by 2030.
Bhavish Aggarwal, co-founder and CEO of Ola, earlier committed an investment of $2 billion in e-vehicles in all cities of India and run one million electricity-powered vehicles on the Ola platform by 2020.
In May last year, Bengaluru-based cab aggregator Ola launched a pilot of its electric vehicles project in Nagpur to deploy electric cars and build 50 charging points committing Rs 50 crore for the project. Masayoshi Son, the founder of SoftBank, Ola’s largest investor, also had ambitions of pivoting Ola as an EV maker in collaboration with Toyota.
It also partnered with Mahindra along with Coimbatore’s Jayem Auto to build electric versions of Tata micro car Nano. However, Bengaluru-based firm decision to scale back on its EV plans is also attributed to its international expansion. In February, Ola launched operations in Australia.
According to industry experts, without a focussed policy and incentives aimed at supporting EV, it will be difficult to force a shift from petrol and diesel-fired vehicles in the country.
In spite of a lot of euphoria around India’s EV programme, speed bumps in the policy and corporate landscape remain to stand still. In India, effective charging infrastructure and regulations around creating the ecosystem for electrical vehicles still remain major problems.
Besides, India does not have enough lithium reserves for manufacturing lithium-ion batteries. There has been no clarity when EV charging will lead to a surge in electricity demand how equipped India is to deal with stretched electricity distribution networks.
At present, Mahindra & Mahindra (M&M) is the only automaker selling a fully electric car in the country. Other including Maruti Suzuki and Toyota Motor offer hybrid versions.
Automotive companies have also voiced their concerns over the shifting attitude of the government towards EV policy.
A group of top vehicle makers — Hero Electric, Okinawa Scooters, Mahindra and Mahindra and Tata Motors, called Society of Manufacturers of Electric Vehicles (SMEV) — were also planning to meet government officials to seek clarity on the position on electric vehicles.
The industry body is seeking more subsidy on electric two-wheelers – currently fixed at up to Rs 22,000. They want the government to spend the entire subsidy amount over two or three years rather than five or six years.
The body also wants the second part of the FAME (subsidy) scheme to be implemented immediately, from April 2, as the existing version of the scheme, if continued, would be meaningless.