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MAR 13 2018

Ola flunks electric vehicle fleet test on Nagpur roads

  • Economic Times, ET Bureau / Hyderabad
  • Created: Tue 13th MAR 2018

 

Indian ride-hailing firm Ola’s pilot project to test a fleet of electric vehicles in the western city of Nagpur was expected to herald a coming revolution in the Indian auto industry. So far, though, 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 big gathering and flagging off by Transport Minister Nitin Gadkari.

But nine months later, the program 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 fuel-guzzling 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 – a city of about 2.5 million people – 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 not-in-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.

The hurdles faced by Ola in setting up sufficient charging stations for a fleet of expensive electric cars with a limited driving range expose the challenges the Indian government and automakers will face if they are to get anywhere near realising the 2030 vision. Global auto makers have repeatedly 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 the charging infrastructure.

Mr. Gadkari added to uncertainty when he said last month that the government would no longer draft a separate EV policy. The Ola project has not turned out to be economically viable for either the company or its drivers, said an industry source.

Magnitude of challenges

Mahindra & Mahindra is the only electric carmaker in India and the high cost of even its entry-level model, which starts at 7,60,000 ($11,665) 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.

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

A shortage of stations and the limited range of cars – about 100 kilometres – 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 several drivers, none of whom wanted to be named as they feared retribution from the company.

 

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