Ola’s dream of the world’s largest electric scooter factory breaks through

But beyond the colorful debates, Ola does not live up to her great ambitions. Mass production of its electric scooters is expected to be pushed back until at least January, according to people familiar with its operations, who have asked not to be identified because the information is not public.

The Bengaluru-based unicorn, which has already delayed initial deliveries to mid-December from October, is pledging to fulfill the rest of the orders by February. But people familiar with it said that Ola, which has heavyweights SoftBank Group Corp. and Tiger Global Management LLC as backers, struggles to iron out manufacturing issues and is only able to manufacture 150 units per day – a slow pace if need be. deliver on time the 90,000 orders that Aggarwal said he had received. The company’s body shop is operating at half capacity and its paint shop is not operational, people said.

Hindered by the global chip shortage and what analysts call overdependence on imported components, Ola Electric’s woes are a microcosm of the challenges India’s auto industry will face as it swivels towards electric vehicles.

They also highlight the hurdles India, the world’s third-largest emitter, could face as it tries to achieve net zero carbon by 2070. Ola Electric’s capacity, valued at over $ 5 billion at the time. from a recent fundraiser, to keep its promise also rubs off on its parent company ANI Technologies Pvt. as it prepares to woo investors ahead of an initial public offering slated for Mumbai next year.

Customers who are waiting for their bikes are already expressing their dissatisfaction. When Ola started taking orders in September, he said deliveries would start in October, which were then pushed back to November and then December 15.

Many unhappy customers – some of whom paid the full 99,999 rupees ($ 1,323) in advance – have taken to social media.

The company’s manufacturing unit is “operational with an automated welding line, battery line and general assembly line and paint shop installed,” Marketing Director Varun Dubey said via email. “We had a minimal delay of two to four weeks instead of the much longer delays (months and up to a year) which are common in the industry,” he added, attributing the delays to the global semiconductor shortage, which has hampered automakers around the world.

Ola Electric refused to share its production figures, citing confidentiality.

The chip shortage has been “an unpredictable beast for everyone,” Aggarwal, 36, told a Reuters Next conference earlier this month.

“It never looks great on anyone if you have a consumer base that is not happy with delivery times,” said Anthony de Ruijter, senior partner at Third Bridge Group Ltd, UK-based investment advisor. United. be a problem for the industry, not just for Ola Electric. “

According to Ruijter, India still relies heavily on the import and assembly model, not only within the Ola ecosystem, but among automakers in general. This in turn creates too many factors that a manufacturer cannot control and often results in a product that is not customized for the local market, he said.

Critical component

India currently imports around 70% of electric vehicle parts from China, a situation that deprives local automakers of a local and reliable supply chain – a critical component for mass production.

This has kept electric vehicles in the country at 1% of overall annual auto sales, compared to 30% in parts of China. Still, the need for cleaner transport solutions is urgent: New Delhi battled the world’s most toxic air last month and World Bank estimates such pollution is costing the South Asian nation 8.5 % of its gross domestic product.

People familiar with Ola’s predicament say that because Ola’s in-house paint shop is not yet functional, the scooters are transported to a factory near Chennai owned by South Korean company Seoyon E- Hwa Co.

Representatives of the Seoyon E-Hwa factory did not respond to phone calls seeking comment. Dubey, chief marketing officer of Ola Electric, said the company works with multiple vendors along the value chain and declined to comment on any one individually.

The pressure on the company is likely to increase if it is to increase its annual production capacity to 2 million units in the first phase as planned. Aggarwal’s plan, shared in March this year, was to expand it to 10 million vehicles per year by summer 2022, or one electric scooter every two seconds.

Some of those who tested the electric scooter in November found it disappointing.

Pradeep M, a YouTuber who reviews automobiles on the video-sharing platform, tested Ola’s electric scooters about five kilometers (three miles) in Bengaluru last month. He said in an interview with Bloomberg News that some slowed down and eventually came to a complete stop when they accelerated to their top speed of 115 kilometers per hour.

Software issues

While Pradeep says India’s hot climate requires adequate engine cooling systems and without one the engines don’t run as efficiently, Ola Electric has denied that there were any issues with the engine overheating in the scooter. “We had provided the scooters with beta software during media testing” whereby a handful of scooters had some software calibration, Dubey said. “These were corrected in the final version which was released for customer deliveries. “

Pradeep, who has ordered an Ola electric scooter and owns another electric bike from rival Ather Energy Pvt., Also said that Ola electric scooters use horizontal suspension at the rear to make room for the trunk. But a vertical suspension better absorbs the shocks of the bumpy tarmac.

“The horizontal layout leads to superior ride, handling and weight balance,” said Ola Electric’s spokeswoman in an email response, adding that her scooter suspension was “the best in the world. industry”. and rolls on one of the bigger tires.

According to Pradeep, other features such as hill hold, used to hold a rider in place on a slippery slope, were not available during testing. These features weren’t in the scooters delivered earlier this month. Ola Electric said several features are still being added and will be updated even if the vehicle is in use – standard practice “like most technology products.”

“Quality issues are more prevalent in the low-speed electric two- and three-wheeler segments in India,” said Komal Kareer, analyst at BloombergNEF in New Delhi. “The segment is inundated with small players who import vehicle components directly from China. After so much waiting, Ola’s delivery delays are worrying customers.”

Meetings at 2 a.m.

Pressure to meet delivery targets is reaching senior management in Ola, with Aggarwal holding meetings as early as 2 a.m., people familiar with it.

CFO Swayam Saurabh and COO Gaurav Porwal have resigned, along with General Counsel Sandeep Chowdhury, the Hindu business line reported in November. The company did not respond to the media report at the time. Ola’s quality assurance manager Joseph Thomas also left last month, Money Control reported. The four executives did not immediately respond to requests for comment made on LinkedIn.

“Amazing results take unreasonable effort,” Dubey said, saying Ola was trying to make products that change the industry. “It takes a huge effort.”

Ola’s rivals, meanwhile, are gearing up. Hero MotoCorp Ltd., the world’s largest motorcycle manufacturer, plans to launch its first electric scooter in March, while Bajaj Auto Ltd., a Pune-based auto rickshaw manufacturer, plans to begin deliveries of its electric scooter. Chetak by the second quarter of next year.

India’s auto industry is in the midst of a transition that is mostly driven by startups and OEMs without decades of experience in the electric vehicle markets, according to BNEF’s Kareer.

“Ola will be absolved of his delays if he delivers a high quality and great value product soon,” she said.

This story was posted from an agency feed with no text editing.

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