SoftBank bullish on EVs in India—are they going to be Ola's next big bet?

This Friday, Ola—in partnership with Mahindra—announced having launched a programme to build an electric mass mobility ecosystem in Nagpur. However, media reports now suggest that Ola is headed the electric car way, or at least that its lead investor—SoftBank—is bullish about the electric car market in India.

Maharashtra’s Chief Minister Devendra Fadnavis and Nitin Gadkari, Minister of Road Transport, Highways, and Shipping inaugurated the multi-modal electric vehicle project and Ola Electric charging station.

Reports suggest that the Indian government is already in talks with SoftBank for low-interest funding of about two lakh electric buses to be deployed in public transport. As a part of the Maharashtra deal, e-cabs, e-buses, e-rickshaws, and e-autos will all be brought on one platform.

During the launch in Nagpur, Gadkari had emphasised the need to rethink India's transport infrastructure and fuel dependency, stressing upon the fact that the government has prioritised the promotion of electric vehicles.

He had also announced that they are engaged with SoftBank for loans at a low interest rate for a green project. He said they want to introduce two lakh electric buses for public transport.

Masayoshi Son, CEO, SoftBank had told Mint that Ola would deploy a million electric vehicles in the next five years in partnership with a carmaker and the government. The Nagpur project seems to be the first step in that direction.

Over the past couple of months, the government has been taking several measures to promote e-vehicles. There are several startups in the space as well, the most notable one being Ather Energy, which launched its first smart electric scooter.

In the cab market is Lithium Cabs, which uses only Mahindra EON vehicles, but for B2B use. He also believes that the large-scale adoption of electric vehicles can bring the monumental change we need.

Fadnavis believes that the large-scale adoption of electric vehicles can bring the monumental change we need.

Announcing the launch of the '100 percent electric vehicle nation by 2030' mission, Fadnavis mentioned that in its support, the state has waived VAT, road tax, and registration for all electric vehicles in the state, and that they look forward to building Maharashtra as a model state for others to emulate in the future.

Electric vehicles will play a major role in reducing the urban pollution plaguing several Indian cities and resulting in health hazards.

The traffic situation in India is just helping the growth of the cab aggregators. A report by India Brand Equity Foundation (IBEF) states that currently, Indian roads carry close to 90 percent of the passenger traffic and 65 percent of the freight.

Several reports also state that Ola might go the electric cab way, no longer remaining purely a cab aggregator.

It’s been over six years since Ola started its operations in India.

Having been in the market earlier and being present in over 104 cities gave Ola the much-needed lead over its San Francisco-based rival Uber. However, while Ola retained over 60 percent of the market, the battle has been hard fought.

While a higher number of players is better for the market and the consumers, there still needs to be a stronger differentiator than just pricing. Soon, discounts may not be the only thing customers look for.

Today, the market dynamics that both Ola and Uber are facing are different. The Indian consumer is discerning and looking for a stronger differentiator. While Ola has launched Ola Play and Select as a differentiator from Uber, it might seem that electric cabs would be its next bet.

If that is indeed the case, what will happen to the existing vehicles and cab drivers on the Ola platform? Will they shift to Uber? These are currently speculations, and the real answer will be out only with time.