PremiumOla Electric has commenced bookings for its e-scooter. Consumers can reserve an Ola Scooter for as low as ₹499. What’s more, one can modify the order or get a full refund on cancellation. In short, the deal looks mouth-watering and it is likely to attract potential consumers, say analysts.
“The state of Maharashtra has an early-bird incentive (valid till 31 December 2021) of Rs15000 and potential customers may want to get ahead in the queue by booking their Ola Electric to avail the extra incentive," said analysts from Nomura Financial Advisory and Securities (India) Pvt. Ltd in a note on 15 July.
Shares of incumbent Indian auto firms were unperturbed by this development. For perspective: shares of TVS Motor Co. Ltd, Bajaj Auto Ltd and Hero MotoCorp Ltd were trading marginally up (less than 1% higher) in early deals on Friday on the National Stock Exchange.
“As seen globally, success of startups could see rapid increases in their market values, while at the same time, incumbent OEMs could see de-rating if they don’t launch compelling products," said Nomura’s analysts. Needless to say, investors will closely watch the launch of Ola’s e-scooter.
Of course, incumbents are upping their ante on this front. It helps here that the government has hiked incentives for electric two-wheelers (e-2W). In a report last month, Ambit Capital Pvt. Ltd analysts said, “By FY26, capital cost of electric two-wheelers (e-2Ws) and petrol 2Ws should be equal, resulting in about 30% lower total cost of ownership for e-2Ws."
Note that the auto industry’s electric two-wheeler volumes for fiscal 2021 at 143,837 units represent penetration levels below 1%. Of course, this measure is expected to increase, going ahead. “This could improve to 5-10% over the medium term with falling EV prices due to the reduction in battery costs, localization efforts and scale benefits. Large listed OEMs (Hero MotoCorp, TVS Motors and Bajaj Auto) are positioning themselves to benefit from the anticipated EV adoption," said analysts from Emkay Global Financial Services Ltd in a note on 16 July. The broker added, “However, considering competition from other OEMs (Hero Electric, Ola Electric, Okinawa, Ampere, etc.), we expect some pressure on market share and margin in the medium term."
To be sure, it remains to be seen whether initial booking reservations for the Ola e-scooter would eventually translate into actual sales. Much depends on the final sale price and if that is high then customer interest could wane.
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