Is Ola hurrying into its electric car dream?

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Is Ola hurrying into its electric car dream?
Ola may be rushing into electric cars when scooters continue to underperformBCCL/Ola/BI India
  • An Ola Electric S1 Pro owner in Tamil Nadu set his scooter on fire reportedly due to inadequate performance and erratic range of the electric scooter.
  • The company was forced to recall 1,441 of its scooters for inspections and run another set of diagnostics tests.
  • Ola is looking to go public this fiscal year and has already raised over half a billion dollars in a pre-IPO round.
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Things haven’t been going great for Ola Electric or its customers. Earlier this week, an Ola Electric S1 Pro owner in Tamil Nadu set his scooter on fire reportedly due to inadequate performance and erratic range of the electric scooter.

This is only one example.

Several Ola Electric customers have reported several technical glitches with the electric scooter and have raised these concerns over Twitter, tagging the company’s chief executive officer Bhavish Aggarwal.

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Last week, a gentleman named Balwant Singh from Guwahati blamed Ola Electric’s faulty technology for son’s serious road accident. Singh noted that his son met with an accident due to fault in regenerative braking, which increased the spread of the scooter instead of slowing it down on a speed breaker. Ola alleged that the accident was a result of overspeeding and backed their claims with the user’s telemetry data on social media.

Whatever the situation may be here, there have been several other customers who have raised red flags over Ola Electric scooter’s technology. So much so that the company was forced to recall 1,441 of its scooters for inspections and run another set of diagnostics tests on battery, thermal, and safety systems.

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Building tech, maturity and valuation all in one go



Technical glitches are not something new. Even Tata Nano – heralded as ‘world’s cheapest car’ in 2008 – was subjected to such issues during its initial days. The bigger problem seems to be Ola Electric’s point black focus on electric cars when it hasn’t spent enough time in perfecting its initial electric scooters technology.

The company has already made elaborate plans to invest $100 million in setting up a new advanced engineering and vehicle design centre called ‘Futurefoundry’ in the United Kingdom (UK) over the next five years. The whole Ola electric car ecosystem would include design and engineering teams based at Ola Campus in Bengaluru. CEO Aggarwal also stepped away from day-to-day operations at Ola to focus on car, cell, gigafactory and other aspects of the company.

“It is important to have focus especially if you are a hardware company. It takes generations to build hardware products, especially on the auto side, so you can say that Suzuki must have been making motorcycles for God knows how many years before they upgraded to making cars. In fact they started by making outdoor motors for motorboats.Then they used that technology knowhow to make motorcycles and then they grew that capability and then they got into cars. They are still focusing on small cars.”

Kunal Khattar, founding partner of Mobility first Founders Fund, told Business Insider.

He noted that this seems like a way for Ola trying to justify the valuation that it has received in a short period of time by expanding its total addressable market (TAM). “Prioritising valuation over everything else, which in the short term is okay. But in the long term, if you want to be a serious OEM [original equipment manufacturer] player, you want to choose either quality, design or performance,” he emphasised.

Notably, ANI Technologies — the parent company of Ola and Ola Electric — is looking to go public this fiscal year and has already raised over half a billion dollars in a pre-IPO round.

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It is also important to note that Ola’s similar hustle was first witnessed while it was entering the electric scooter game. The company started delivery of its electric scooters within the six months of the launch of its scooter production facility, which is the world’s biggest electric scooter factory and completely run by women.

While the move does seem premature, some believe that the move is rather timely.

“Ola Electric’s move towards entering the autonomous driving vehicle segment through their electric car is a major step and will help India make its mark on the EV roadmap globally, provided Ola is able to achieve their global ambitions. Given Tesla took approximately 8 years to perfect the design of its electric car, I feel Bhavish Aggarwal’s move towards getting kick-started on Ola’s electric car is rather timely and will play a major role in “Built in India. For the World” strategy that we are seeing panning out among Indian startups these days,” Shahan Sud, an investment professional at Indian Angel Network, noted.

Will Ola be able to sell electric cars with such incidents coming to light?



Khattar noted that there have only been a couple of incidents and it is important to understand what went wrong in those cases, whether it was the user defect, hardware defect or software defect.

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“Couple of incidents like this doesn’t mean that the OEM is making sub-standard things and has taken shortcuts in quality and this and that. I think it is important to understand incidents like these happen with all manufacturers, all fuel types. EV, petrol, diesel and CNG sab mein hota hai [happens with everyone],” he added.

He also emphasised that an OEM declaring a call-back is a sign of maturity and acceptance of an issue that they would want to fix.

Sud also noted that the recent incidents of Ola Scooters — and how Ola Electric tackles the headwinds it brings along — will not only make them “wiser”, but it will also help in ensuring customer loyalty is intact by the time the company’s electric cars are launched.

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