Cab aggregator ventures into two-wheeler manufacturing with a designed and Made in India product that it proposes to sell in India and across the world. If it succeeds, it will come as a massive booster shot to two of Modi’s flagship schemes.
This is possibly the biggest case of Start-up India meeting the Make in India initiative and scaling up to global scale in the quickest possible time, in line with the vision of Prime Minister Narendra Modi.
Unicorn cab aggregator Ola has begun constructing the world’s largest two-wheeler factory on a 500-acre plot in Tamil Nadu that will churn out 10 million electric scooters and two-wheelers, or one EV every 2 seconds, once it reaches full capacity by June-July 2022. This means the OlaFuture Factory, as it is called, will account for 15 per cent of the two-wheeler capacity in the world.
It is expected to begin operations soon with an initial output of 2 million EVs. The plant will be Ola’s global manufacturing hub and ship vehicles within India as well as the UK, Europe, Australia, New Zealand and Latin America, among other markets.
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“Sharing our vision of the Ola Futurefactory! With 10M units/yr, it'll be the largest 2W factory in the world, 15% of world’s capacity! With 3000+ robots, it'll be the most advanced & with 100 acres of forest, carbon negative operations, it‘ll be the most sustainable,” Ola founder Bhavish Aggarwal tweeted recently.
His Ola Cabs, a 10-year-old ride hailing start-up that competes with Uber in India and several global markets like the UK, Australia and New Zealand, is valued at about $6 billion.
Ola Electric is his second start-up. Incorporated in 2017, it counts the likes of Softbank and Tiger Global Management as investors and has already crossed the billion-dollar valuation mark. These two marquee global venture capital funds are also big investors in the Agarwal’s cab aggregator as well. Besides, South Korean automobile majors Hyundai Motor Company and Kia Motor Corporation have also invested in this venture.
Just as he took on global behemoth Uber with his first venture, Ola Electric will enter a global scene that is beginning to crowd up with players like Elon Musk’s Tesla and China’s Nio stealing an early lead.
Then, every automaker worth the name, from Toyota Motor Corporation to Daimler Benz to homegrown majors like Tata Motors-Jaguar Land Rover, Here MotoCorp and several others are racing against time and each other for a piece of an emerging $200-billion market, which is fast becoming the new automotive holy grail.
In keeping with the Prime Minister’s vision of an Atmanirbhar Bharat (Self-Reliant India) that is at the forefront of sustainable development, the two-wheelers will be indigenously designed.
“It’s a vehicle we’ve engineered ground-up so India can get a seat at the world EV table," Agarwal said in a recent interview, adding that domestic firms “have the smarts and energy to leapfrog into the future of EV”.
The scooter will have a “removable battery, high performance and range” and has already won awards for its design, according to some reports.
The factory will be among India’s most futuristic manufacturing unit. Mostly automated, much of the assembly operations will be carried out by about 3,000 robots and automated guided vehicles. “The factory will incorporate Industry 4.0 principles and will be powered by Ola’s own proprietary AI Engine and tech stack that will be deeply integrated into all its systems,” Ola told the media, adding: “The company has already brought on board global partners and suppliers as it works towards getting its factory, billed to be the world’s largest scooter factory, operational in the coming months.” The venture will generate 10,000 jobs.
The massive production volumes are expected to drive economies of scale and enable the company to sell its electric scooters at a starting price of $1,000, making it competitive vis-à-vis its petrol engine rivals.
If this venture succeeds – and given the pedigree of the founder and his investors, there is every reason for optimism on this count – it will provide a massive boost to Prime Minister Modi’s Make in India and Start-up India initiatives by producing the country’s first domestically designed and manufactured world class, global scale product.
Modi had launched both these programmes early in his first term to transform India’s business landscape and position the country as a global innovation and manufacturing hub.
While the second mission has met with success, with India having the world’s third-largest start-up eco-system, the first is still a work in progress that is slowly beginning to show results as companies such as Apple, Samsung and several others rush to set up smartphone, electronic and other factories in the country.
The Ola venture could just tip the balance decisively in India’s favour.