Ola Electric has decided to focus its e-scooter business over its plans to launch electric cars. With an objective of raising roughly USD 660 million, the Softbank-backed company is refocusing its operations in anticipation of a big initial public offering (IPO) in August.
The creator of Ola, Bhavish Aggarwal, revealed intentions in 2022 to launch an electric sports vehicle with an all-glass roof that could reach 100 km/h in under four seconds. In an interview with Forbes published in September 2023, he restated same goals. According to insiders, the project has been delayed in order to concentrate on the production of batteries and two-wheelers, despite the persistent difficulties caused by India’s inadequate infrastructure for charging vehicles.
The decision takes into account the larger industry environment, in which the rapidly expanding infrastructure is making electric scooters more popular than cars. In June of this year, India, the third-largest auto market in the world, witnessed 483,000 sales of e-scooters compared to roughly 45,000 sales of electric cars.
According to an insider, Ola’s automobile project may be shelved for a minimum of two years while the firm focuses on increasing sales of its two-wheelers and increasing its capacity for producing batteries. The potential rivalry that the electric car could have presented to big firms in the growing market, such as Tata Motors, highlights this change in strategy.
Ola Electric has not provided a statement regarding these events. This year’s biggest IPO in India is expected to be the one that happens soon. In barely three years after its founding, Ola—which is not profitable—has taken a 46% market share in the e-scooter industry, even after lowering its sales goals in response to reductions in government subsidies.
In 2022, Aggarwal—who already runs an e-scooter factory in Tamil Nadu—had plans to build a new facility that could produce a million electric automobiles a year. He had an idea to deviate from the small- to mid-sized car designs that are common in India. For the automobile project, the company hired over 100 people and hired outside consultants; however, since then, roughly 30% of the workforce has left, while others have been moved to different positions.
First conversations had been held with auto component suppliers, and a luxury automobile prototype, modeled like a BMW, was built in the UK. If and when the automobile project is revived, the original goal of creating a premium sports car type will be abandoned in favor of creating an inexpensive, mass-market electric vehicle.
This year has been difficult for automakers due to lower sales forecasts in key countries and more competition from lower-priced Chinese imports. At the same time, the sector is still making big moves toward electric vehicles.
