This news could be just what the doctor ordered to give a much-needed recharge to the electric vehicle industry in India.
A report by financial newspaper Mint has it that India's largest shared transportation platform Ola, in which the SoftBank Group is a major investor, could look at introducing a million electric cars in partnership with an electric vehicle (EV) manufacturer and the government.
For the country’s fledgling EV industry, which sold a total of 22,000 EVs in 2015-16, this could come as a massive boost to drive growth and transform the electric mobility scenario in the country.
Speaking at the Hindustan Times Leadership Summit in New Delhi yesterday, Masayoshi Son, chairman of the SoftBank Group, said he is bullish on the EV sector in India and would explore investment opportunities. Importantly, he said, that the EVs will be locally manufactured in line with the government’s Make in India programme. The Mint has quoted him as saying: “I think this will be the biggest initiative for electric vehicles in India.”
Masayoshi Son, who aims to meet the one-million EVs in India target by FY2020, also met prime minister Narendra Modi regarding the green initiative. The current challenges to the growth of the EV industry in the country is the hugely inadequate charging network and the high cost of manufacturing EVs. It is understood that along with EVs, the SoftBank Group chairman is also bullish on a charging network and solar energy. Clearly, a big-ticket investment from Ola in the EV sector will give a new fillip to the industry and also make the government think a lot more seriously on offering more support to e-mobility.
In this context, it is to be noted that earlier this year Mahindra & Mahindra struck an alliance with Ola and it is likely that, in all likelihood, that Ola could source the EVs from Mahindra Electric, the EV arm of the Mahindra Group.
Mahindra Electric to benefit
As and when the plan to introduce a large number of EVs in Ola’s fleet fructifies, expect Mahindra Electric, the first EV manufacturer in India and the only one with manufacturing scale, to benefit substantially.
On September 8, 2016, Anand Mahindra, executive chairman of the Mahindra Group, along with Bhavish Aggarwal, founder and CEO, Ola Cabs, signed a Memorandum of Understanding (MoU) to enter into a strategic alliance.
The alliance will offer Ola's driver partners a package which will allow them to buy Mahindra vehicles at lower than market prices, attractive financing with zero down payment, low interest rates and subsidised insurance premium. The partners will also 'explore other areas of joint collaboration to build the new generation of mobility solutions'.
"To me, this is an important strategic alliance for the Mahindra Group, one that I believe will change the contours of our industry, while giving us the first-mover advantage in the fast-growing sharing economy of India," Anand Mahindra, chairman, Mahindra Group, had said.
Bhavish Aggarwal, founder and CEO, Ola Cabs, and Anand Mahindra, executive chairman of the Mahindra Group.
As the contours of the industry change, Mahindra sees EVs benefitting from the growing trend of shared mobility platforms. Therefore, it won't be surprising to see Ola, for example, becoming a key fleet customer for the Mahindra e-Verito electric sedan or the small electric car, e2o. The Mahindra Group is optimistic that e-mobility is the way to go. It is also targeting green transportation for goods and on October 6, launched the eSupro, the all-electric version of its Supro cargo and passenger van.
"The game-changer for EVs maybe fleets around the world," said Mahindra. His group is already experiencing this growing trend as a fleet of 600 Mahindra Genze electric scooters are plying in San Francisco as part of a scooter rental service called Scoot Network. In India too, a fleet of a couple of hundred e2os have also found a customer in Bangalore-based fleet service provider, Lithium, which provides services only to the corporate sector. Such developments will help the EV industry to negotiate better with the government for support, feels Mahindra. He says, "When you reach that scale, you can put benevolent pressure on the government."
NEMMP's ambitious target
In 2013, the government of India launched the National Electric Mobility Mission Plan (NEMMP) 2020. It aims to achieve national fuel security by promoting hybrids and EVs in the country. and has an ambitious target of 6-7 million sales of hybrids and EVs year on year from 2020 onwards.
The NEMMP aims to incentivise adoption of green vehicles along with robust domestic manufacturing capability to meet present and future demands. Still, the big-time migration to green transportation has been eluding India.
Also read: E-mobility, BSVI to reshape India's two-wheeler industry
According to Sohinder Singh Gill, CEO of Hero Electric and director - Corporate Affairs, Society of Manufacturers of Electric Vehicles, "The answer largely lies in three great inadequacies. One relates to the lack of charging infrastructure and the other remains lack of easy access to institutional finance for purchase of EVs. Also, as migrating to new technology, howsoever good, is never a seamless thing, government and institutions at various levels need to incentivise people to adopt green solutions. At times, they also need to push people a bit."
With SoftBank’s target for rolling out a million EVs in India within the next five years, that scale is achievable. The time has come for the country to plug into EVs as a form of mainstream – as well as green and clean – transportation.
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