Ola e-scooter to start at Rs 85,000; eyes 50% of two-wheeler market

Ola wants to position itself as an attractive alternative to the popular ICE 125 cc scooter range through its own electric offering

Ola Electric, which opened for bookings on Saturday and has netted as many as 100,000 bookings on the very first day, is expected to price its electric scooter in the range of Rs 85,000-Rs 1.1 lakh. The price range is one that accounts for 70 per cent of conventional, internal combustion engine (ICE) scooter sales in the country.

Speaking with Business Standard, Varun Dubey, head of marketing at Ola Electric, said: “We are addressing the entire two-wheeler market in the country — which is around 21 million per annum. We see no reason why customers will not shift to electric. The bulk of the ICE scooter market in India is between  Rs 85,000 and Rs 1.1 lakh on road , and that is where we will position our range of  electric scooters." 

Dubey says that Ola’s target is to get 50 per cent or more of the total two-wheeler market — ICE and EVs. With a projected capacity of 10 million two-wheelers per annum, they should be able to grab half of this market, he says.

At present, of the total two-wheeler market of 21 million vehicles per annum, scooters account for 6.5 million, while the rest is mostly motorbikes. “We will also start booking for international market sales soon, as there is a large market in southeast Asia, Europe, amongst others,” says Dubey. He reckons that the total global two-wheeler market is around 60-65 million vehicles. 

Asked whether Ola will be able to compete with the Chinese in the international arena, Dubey says, “It’s not a zero-sum game. There will be multiple players and we want to be one of them. Our plant capacity accounts for nearly 15 per cent of the world’s total production. So we have scale.”

Dubey says that to address the challenge of charging the EVs, Ola will roll out 100,000 fast chargers in over 400 cities in the country. These chargers can charge the battery to 50 per cent in 18 minutes. That apart, the company will provide an overnight charger to its EV buyers for use at home.

Ola will initially address the B2C market, and not the B2B market, Dubey has said.   

The company on Sunday announced that it has got bookings of over 100,000 (the booking amount is Rs 499 which is refundable) for its electric scooter which will be offered in more than one model. The scooters will run for 150 kilometres on one full charge at a maximum speed of 100 km an hour. The models have three to four colour choices. Since it does not have a large dealer network, Ola is delivering the product at the customer’s doorstep for test rides. The company plans to build its dealer network slowly.

Analysts say that even if 30 per cent of those who booked on the first day continue with their bookings, Ola would have orders for 30,000 electric scooters, which is nearly as much as the total EV two-wheeler sales in the country between January to June this year.

However, the incumbent two-wheeler manufacturers such Bajaj, TVS, Hero Motocorp are not impressed with Ola’s plans. A top executive at a leading two-wheeler company points out: “We have heard many brazen claims from them. So it’s best to wait and see.”  

Ola is investing Rs 2,400 crore to set up a plant which will have a capacity to produce 10 million vehicles by next year. Earlier, it had announced that the plant would achieve 2 million capacity by the middle of this year.   

Incumbent operators say that the growth in the EV market will be gradual and, hence, they are investing accordingly. McKinsey projects that by 2025, India’s electric two-wheeler market will hit around 4.5-5 million vehicles per annum. Tarun Mehta, founder of Ather Energy (funded by PE and Hero), a key competitor of Ola, projects that the market will go up to 5-6 million vehicles in the next five years. Ather Energy is investing Rs 650 crore to expand its plant in Hosur from 110,000 to 500,000 electric scooters per annum by next year.

Mehta believes that the inflexion point for electric two-wheelers has come already and the price differential between their Ather 450 Plus electric scooter and that of an ICE-powered 125 cc conventional scooter is now only Rs 5,000-8000. Besides, buyers can save Rs 2,000 on petrol per month if they go for an EV.  With the increase in subsidies and the incentives offered in some states, the price of e-scooters will fall below Rs 1 lakh, Mehta adds.