Ola’s sputtering India e-vehicle trial a red flag for Modi plan

Ola’s pilot project to test a fleet of electric vehicles in Nagpur was expected to herald a coming revolution in the Indian automobile industry. So far, it has only exposed fractures in Prime Minister Narendra Modi’s ambitions to make all new vehicles electric by 2030.

With an initial investment of about $8 million, SoftBank-backed Ola launched the project last year at an event that had all the trappings of a state function, including a flag-off by transport minister Nitin Gadkari. But nine months later, the programme has hit a snag: Ola drivers, unhappy with long wait times at charging stations and high operating expenses, want to return their cars and switch to fuelguzzling variants.

Out of 20 Ola electric car drivers, interviewed by Reuters in Nagpur, more than a dozen said they have either returned their electric taxis and switched to diesel, or are planning to do so.

Ola had said it would make 50 charging points available across four locations in Nagpur for its fleet of 200 electric vehicles, but on a visit to the city in late January, Reuters found only about a dozen charging points. Ola has since added 10 additional charging points but is still short of its target.

Ola did not respond to requests for comment for this article.

Getting infrastructure built in the world’s biggest democracy where a notin-my-backyard culture proliferates is a barrier for a lot of businesses in India. And it is proving to be the same for charging stations — Ola was forced to close one in Nagpur last year after protests by residents angered by traffic jams caused by drivers.

Global carmakers have warned that India is not ready for electrification, saying the government must first lay down a clear, long-term policy, provide incentives to encourage manufacturing of electric vehicles to bring down their cost and create infrastructure.

Gadkari added to uncertainty when he said last month that the government will no longer draft a separate electric vehicle policy. He did not comment on the 2030 vision.

The Ola project has not turned out to be economically viable for either the company or its drivers, said a source.

“The project’s not flying as of now and the economics is not working out,” the source said.

Electric car sales in India made up

less than 0.1 per cent of annual sales of more than 3 million passenger cars. The lack of demand is mainly because they are expensive — due to high battery costs — and as their range is limited and there isn't a charging infrastructure.

In China, in 2017, electric vehicles made up about 2 per cent of annual passenger car sales of 24.7 million.

The Indian government had been determined to promote electric vehicle use, starting with public transport to combat rising pollution and reduce the nation's dependence on imported oil.

India’s 2030 ambition was part of a broader move by countries like China and the UK, which have set similar goals. This has spurred billions of dollars in investments by carmakers like Volkswagen and Ford Motor.

M&M is the only electric carmaker in India and the high cost of even its entrylevel model, which starts at ~760,000 is a barrier for many first-time car buyers, and a non-starter for taxi drivers who can get a diesel or gasoline propelled car for about half the price.

While Ola has tied-up with Mahindra for the pilot project, its struggle to make the fleet viable in small Indian cites with much less congestion and space constraints than cities like Mumbai, underscores the magnitude of the challenges.

A shortage of stations and the limited range of cars has meant longer queues to recharge. During summer months when batteries discharge faster and need to be recharged more, the situation may worsen unless more charging points are added, said drivers.

The cars are owned by Ola and leased to drivers for ~1,000 a day, but many complain that the amount is too high and they need to work for 12-16 hours to make a decent living, given they waste 34 hours a day on charging.

One of the drivers said that after paying Ola the rent for the car and shelling out ~500-600 per day for charging, he is left with about ~500 rupees at the end of a 14-hour day giving him little time to rest or spend with his family.

“If they don't give us the (charging) facility, why should we drive these cars,” said the driver, who had just spent an hour waiting for his turn to charge the car, and would have to wait for another 90 minutes while it charges.

Ola founder and chief executive officer Bhavish Aggarwal told Reuters last April that the company would pilot a few thousand electric vehicles in several Indian cities in 2017 and then scale up.

However, it has still to take the experiment beyond Nagpur.