On the 75th Indian Independence Day, OLA electric, a mobility startup OLA cabs subsidiary, launched its maiden electric scooter offerings. The company forayed into the country’s ripe EV market with the S1 and the S1 Pro models.
These models feature the same design and an identical electric motor producing a peak power of 8.5 kW. However, the S1 features a 2.9 kWh battery, and the S1 Pro has a considerably larger 3.9 kWh battery giving the latter a claimed range of 181km, as per the government-approved India Drive Cycle (IDC) range-testing method.
The models are priced at INR 99,999 for the S1 and INR 1,29,999 for the S1 Pro. The prices, at present, are inclusive of FAME II subsidies but exclude individual state subsidies, which will lower the costs considerably.
For example, with Gujarat’s state subsidy applied, the price of the OLA S1 comes down to Rs 79,999 (on-road). Similarly, the subsidy in Delhi brings the price down to Rs 85,099, while the Maharashtra subsidy policy, once ratified, will bring the price down to approximately Rs 89,999.
By 2025, all two-wheelers sold in India should be electric; that’s my mission. The plan is to begin an initial production run of one million scooters in the coming months, which will be ramped up as demand builds, said Bhavish Aggarwal, chairman and group chief executive officer of OLA Group.
“We want 50% of all electric two-wheelers produced for the world to be made in India,” Aggarwal said at a media conference ahead of the public unveiling of the scooter. “The ambition is to make India a global EV leader.”
The great Indian EV Market
India is the world’s largest two-wheeler market–scooters and motorcycles clog roads and add to pollution in its densely-populated cities. Electric vehicle sales are low but have climbed steadily as the government pushes for its adoption through subsidies.
According to Mordor Intelligence, a market intelligence and advisory firm, the Indian Electric Vehicle Market was valued at $5 billion in 2020. It is expected to reach $ 47 billion by 2026, registering a CAGR of above 44 percent during the forecast period (2021-2026).
In April 2019, Niti Aayog, the federal think tank, published a report titled “India’s Electric Mobility Transformation,” which pegs EV sales penetration in India at 70 percent for commercial cars, 30 percent for private vehicles, 40 percent for buses, and 80 percent for two- and three-wheelers by 2030. It is this 80 percent that OLA aims to bite a share of by manufacturing e-scooters.
Factors driving the EV Market in India
E-commerce companies are launching initiatives to use e-Mobility for last-mile deliveries to reduce carbon footprint. India is experimenting with e-Mobility for public transport, and the country has deployed electric inter-city buses across some major cities.
In addition, state governments are also playing an active role in deploying policies encouraging the usage of EVs, according to Mordor Intelligence.
If we look at states, Kerala aims to put one million EV units on the road by 2022 and 6,000 e-buses in public transport by 2025.
Similarly, Telangana aims to have EV sales targets for 2025 to achieve 80 percent 2- and 3-wheelers (motorcycles, scooters, auto-rickshaws), 70 percent commercial cars (ride-hailing companies, such as OLA and Uber), 40 percent buses, 30 percent private cars, and 15 percent electrification of all vehicles.
The EV market in India has gained significant momentum after implementing the FAME India scheme with its aim of shifting toward e-mobility in the wake of growing international policy commitments and environmental challenges.
Moreover, India offers the world’s largest untapped market, especially in the electric two-wheeler segment. As 100 percent foreign direct investment is allowed in this sector, the automatic route market is expected to gain momentum during the forecast period.