Inside Ola's mega factory, India's potential answer to Elon Musk's Tesla

Bhavish Aggarwal-led Ola Electric's Rs 2,400 crore unit is being built at record-breaking speed to become the world's largest two-wheeler plant

It takes over three hours of drive and covering more than 130 km from tech hub Bengaluru, to reach the ‘Ola FutureFactory’ site in the Krishnagiri district of Tamil Nadu. The electric vehicle facility surrounded by shoe factories, temples, coconut trees, lakes and dusty roads is being constructed to become the world’s largest two-wheeler factory. As you reach the gate, one can see the massive scale of the operations of the facility. It is being built with an investment of Rs 2400 crore on 500 acres of land, which is equal to about 378 football fields.

Inside, a drone hovers for security and photography purposes. Many excavators and workers are busy on the construction site. Among them is Bhavish Aggarwal, chairman and group chief executive of Ola, who like other workers is wearing safety boots, a hard hat, reflective vest and sunglasses. He is testing a shiny black prototype of Ola’s electric scooter that is expected to be launched in the next few months. Showcasing how the vehicle can be controlled using a touchscreen dashboard or a phone app, Aggarwal plays the Punjabi hip-hop song "Satisfya." The scooter is also embedded with a SIM and Aggarwal receives a phone call from one of his colleagues.

“Hello, awaaz aarahi hain (can you hear me?). Can we get some cold water here,” quipped Aggarwal. The vehicle would have a voice assistant like Apple’s Siri and all the software is being developed inhouse. The higher version of the vehicle would also be equipped with cameras for assisted driving features. The scooter has a sophisticated design and a unique banana-shaped battery that is easy to remove and charge anywhere.

“The product is ready. The plant is getting ready,” said Aggarwal. “We are racing and everybody is working hard to finish this on time.”
 

Bhavish Aggarwal

Building a factory is a massive engineering challenge and it has been a huge learning for Aggarwal, a computer engineer from the Indian Institute of Technology, Bombay, who founded ride-hailing firm Ola in 2010 along with his college mate Ankit Bhati. Ola was valued at $6.5 billion when it raised funding from South Korean vehicle maker Hyundai in 2019. Ola does a billion rides a year and has 2.5 million driver-partners and has 250 million customers across three continents. It is present in 200 cities in India. “The pandemic was a blip, but our business (ride-hailing) has recovered very well,” said Aggarwal.

Aggarwal’s big ambition now is to make a huge impact through the electric vehicle business. In July 2019 Ola Electric Mobility (Ola Electric), the ride-hailing firm’s electric vehicle arm raised $250 million from Masayoshi Son’s SoftBank. It was just a two-year-old firm at that time. The investment made the fledgeling venture a “unicorn”, or a start-up valued at more than $1 billion.

“What we do here involves a lot of engineering and it is exciting,” said Aggarwal.

Ten years ago the biggest disruption in mobility was the shared services business model, which Ola continues to execute and scale-up. But the bigger ambition for the firm has been to build sustainable, safe and accessible mobility for everyone. These efforts started way back in 2017 when Ola launched its electric vehicle pilot project in Nagpur. The aim was to assess how the existing EV technology would perform in the Indian setting. It was a multimodal pilot which included e-rickshaws, e-two wheelers and e-bus and charging network. But the ecosystem was not ready then.

“That pilot taught us a lot like the technology required to scale up electric vehicles and the cost competency required was not there yet,” said Aggarwal.

The firm realised that it would need to take a different kind of effort. Ola Electric started addressing the problem at a fundamental level ranging from the supply chain to research and development. The only way to create an impact on the electrification business is by playing at scale. Aggarwal said this business cannot be built by selling 2,000 vehicles per year. Unless it is scaled up, one cannot bring the cost down. Ola’s mega factory is aiming to address that issue.

“EVs have become hot and exciting this year,” said Aggarwal. “What you see around is not ‘raat ko koi sapna aaya’ (you saw a dream during sleep) and started. The whole team has been working very hard for the last three years.”

Aggarwal said his mission is to help India come out on a world stage of the electrification revolution. There are many top companies innovating in this space like Elon Musk’s Tesla and a bunch of the U.S and Chinese firms. Most of these top companies including Tesla and Nio Inc are focusing on premium and luxury market products. But the mass market is not about luxury products or large SUVs. Most of the products sold in the space are urban mobility vehicles including two-wheelers, three-wheelers,  four-wheelers and smaller sedans.

“That is the meat of the market and something nobody in the world is solving,” said Aggarwal. He said two-wheeler space in India and around the world, is significantly an under-penetrated market.

Ola Electric Scooter

Ola Electric is starting with two-wheelers like scooters and has plans to make motorbikes as well as four-wheelers. The aim is to build a global business including the export of the products. Aggarwal said that people would have different mobility needs. They would get fulfilled through shared service like ride-hailing as well as private ownership of vehicles.

When compared to Elon Musk’s Tesla Gigafactory in Nevada, U.S, Aggarwal said his factory building is about two-thirds of that. Tesla is mainly making electric cars and that needs more space.

In India, Ola is now in direct competition with electric two-wheeler makers, such as Ather Energy, Hero Electric, and TVS Motor Company. Many traditional players have plants in different parts of the country and suppliers have to make different investments to be closer to the facility. Ola Electric is following a different philosophy, where it would have one mega plant which would bring the supplier ecosystem together and this would reduce the costs and scale up the production of EVs.

Unlike traditional automotive firms, Ola Electric controls its core engineering and technologies in-house. This includes designing and building its own battery packs, motors, vehicle computers and software.

Ola FutureFactory is expected to be the country’s most automated, with about 3,000 robots once it is operational to its full capacity. Expected to create 10,000 jobs, the factory will incorporate Industry 4.0 principles. It will be powered by Ola’s own proprietary AI Engine and tech stack that will be deeply integrated into all its systems. Ola has roped in Swedish automation giant ABB as a partner for robotics and automation solutions. It has also partnered with German firm Siemens for integrated digital twin design and manufacturing solutions. This will help digitalise and validate product and production ahead of actual operations.

Last year in May, Ola Electric acquired Etergo BV, an Amsterdam-based electric scooter original equipment manufacturer. This acquisition has further bolstered Ola Electric’s strong engineering and design capabilities with the Etergo team’s extensive vehicle development experience with leading automotive companies like Tesla, General Motors, Ferrari, Jaguar, and BMW.

Ola Electric has also been attracting top industry leaders to help it in its mission. It brought on board General Motors veteran Jose Pinheiro to head its global manufacturing and operations. Earlier, Ratan Tata-backed Ola Electric had inducted automobile industry veterans like B V R Subbu and Jaime Ardila into its board. They bring with them their deep industry expertise and global mobility experience.

“This is a technology race and not assembly of vehicles,” said Aggarwal.

The Ola mega factory would have 10 production lines and a total annual capacity of 10 million vehicles by 2022. This means one scooter would roll out of the factory every 2 seconds at full capacity. It would be about 20 per cent of the global two-wheeler production capacity.

Ola’s mega-factory will have an initial capacity of 2 million units a year in phase 1 around June this year. It will serve as the company’s global manufacturing hub for its range of electric-powered scooters and two-wheelers across India and international markets including Europe, UK, Latin America, Asia Pacific, Australia and New Zealand.

An estimated more than 10 million man-hours have been planned to bring the factory up in record time, with the first phase becoming operational in the coming months. Through this entire process, Ola is maintaining its strong focus on sustainability. The company has ensured the conservation of the green belt in the area by preserving and transplanting the trees on site. Ola plans to have a large forest area within the site and reuse the excavated soil and rocks within the factory. The factory would be solar and renewable energy powered. For instance, the Mega-block building at the campus which would house all production facilities would have a solar roof-top. It would be spread across 43 acres, which is equal to 150 Olympic size swimming pools.

“Local community is key for us and we are going to announce a lot of programmes for them,” said Varun Dubey, head of marketing at Ola Electric and Ola Financial Services.

The coronavirus pandemic has wreaked havoc on everyone as well as businesses across the globe. Aggarwal himself lost someone in the family due to the pandemic. He said the resilience shown by the citizens and industries defines how to deal with the crisis. But the pandemic has also created new opportunities at a time when the world is thinking deeply about climate change and new supply chains and people are becoming more conscious about their health and safety. Aggarwal’s vision is to make India a hub for the production of urban mobility vehicles as the journey of electrification would only accelerate now.

“We want to be world leaders in that,” said Aggarwal.“We believe we have a very unique opportunity to put India on the world map.”

Ola FutureFactory in numbers

• Rs 2,400 crore: investment for world’s largest two-wheeler factory
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• 500 acres: Total area of the facility
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• 10 million: Annual vehicle-making capacity by 2022
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• 2 seconds: Time taken for factory to roll out one scooter at full capacity
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• 20%: Share of current global two-wheeler capacity.
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• 2 million: Number of vehicles at initial annual capacity.
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• 3,000: Robots, AI-powered, built on Industry 4.0 principles.
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• 10,000: Direct employment to be created by Ola.
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• 150: Size of Ola Megablock on the campus, expressed in the number of Olympic-size swimming pools.