Ola company is gaining lot of attention these days. It is trying to electrify the world of urban mobility. The question is how, where and when.
First of all Ola is building the world's largest scooter facility in Hosur Tamil Nadu on a 500 acre plot. Btw, Hosur also has TVS and Ashok Leyland factories in the Krishnagiri district in Tamil Nadu.
This Ola plant is to start production from the middle of 2021. At full capacity the 20 million production capacity of this Ola plant would be about 15% of the global scooter production.
For Bhavish Agarwal, 35 year old 2008 IIT Bombay engg graduate who is the CEO, it is a great opportunity to ensure shared, sustainable, safe, accessible mobility to the urban masses. Is this guy set to change the face of urban mobility in India for ever ? First he took us away from private ownership of vehicles to shared vehicle and now he wants to take us back to private ownership with a different technology ..
Why electric scooters and why this large number ?
2 wheelers have been the mode of transport of the common man throughout the world and India is no exception. With the increase in cost of petrol, even this mode was getting bit unreachable for the masses. Ola enters the Indian market at the right time.
Electric 2 wheelers will be a big hit with the Indian population which still has a major portion still not able to afford a 2 wheeler, forget a 4 wheeler. The high cost of vehicle and of the fuel, petrol is the biggest deterrent for most of the people these days. In India, the present number of scooters for a population of 1000 is just 160 comparing with 600 for Vietnam. That's a long way to go ..
The good thing about the Ola plant in Hosur, Tamil Nadu is the size. It will at full production manufacture 20 million ie, 20,000,000 EV scooters annually, besides motorcycles and 4 wheelers too in due course. Manufacturing to scale of this magnitude is sure to bring down the unit manufacturing costs. Besides it can also spur an array of innovations in the manufacturing sector in India.
The manufacturing plant is about 43 acres in area under one roof, the largest in the world. The first phase of production at an investment of INR 2400 crores, of 2 million annually, though supposed to be out by June has been delayed a bit and it is hoped will be open in the very near future.
The plant has an employment potential of 10,000 people and is being financed majorly by venture capitalists SoftBank of Japan and Tiger Capital, the New York based venture capital fund.
As a management student, one is interested in understanding the risks associated with this investment. Entirely funded by venture capitalists, who are looking at the future prospects of this mobility mode, the risk is equally shared by Ola and the venture capitalists, who have done their due diligence before committing INR 2400 crores to this project.
The support from Tamil Nadu govt for this project, besides Tamil Nadu being the automobile hub of the country, can give a lot of push to successful, high quality low cost manufacturing possible from this state which is already blessed with enough technical manpower in this area.
What is the lesson for the other entrepreneurs of India at the massive risk Bhavish is undertaking. With great risk appetite, the Ola EV scooter case spearheaded by Bhavish is a lesson automobile manufacturers world over is looking with awe and admiration. How a young lad of 35 years is rewriting automobile dynamics in India ?
Will he be able to move with the same momentum when the global EV leader TESLA enters the Indian market maybe in a few years time. Would Bhavish have set the ground for a tough fight between an established global EV player and a new player in the Indian domestic market ? What does this Make in India for the world entail for the global EV market ?
Click here for an interesting video from CNBC to listen to..
George. (picture courtesy Ola, the info in this article has been taken courtesy CNBC)
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