Ola's ambitious initiative in electric vehicle sector

It is commendable that Ola, originally a ride-hailing app aggregator, has chosen to diversify into the manufacture of electric scooters. The company has just announced plans to set up a Rs 2,400 crore plant in Hosur, Tamil Nadu with a capacity to produce 2 million e-scooters. In a market overwhelmingly dominated by fossil fuel-guzzling combustion engines, it is indeed a brave move. 

However, electric vehicles (EVs) are the way of the future as Elon Musk’s entrepreneurship with Tesla Motors in the US has shown. As fossil fuel reserves dry up and green concerns about pollution rise, it is only a matter of time before people begin to shift. 

It is estimated that by 2027, the size of the global electric vehicle industry will touch $803 billion. The Indian consumer though, research shows, is still quite skeptical about EVs. A recent cost analysis done by the firm Kearney has revealed that the total ownership cost (TCO) of EVs—including the cost of acquisition, running and maintenance—is way above gasoline vehicles, and is the biggest deterrent. 

The lack of infrastructure such as sufficient number of charging stations too is a disincentive. This is reflected in sales numbers. FY2020 saw sales of just 1.56 lakh EV units, a small fraction of the around 30 lakh passenger vehicles and over 170 lakh regular gas-guzzling two-wheelers sold.

While Ola has put its money where its mouth is, the same cannot be said about the Union and state governments. The Centre had announced with much fanfare a road map to make India a 100 per cent  electric vehicle nation. This is unlikely to be achieved as, on the ground, tacit support for the traditional auto companies continues. EVs will only become popular if they are cost effective and backed up by infrastructure. We are still waiting for incentives like waiver of road tax and registration charges. 

TERI has recommended that a good start would be to popularise electric mass transport—buses and taxis—as a first step. The least the government can do is to take this up on a war-footing.