Ola Electric Mobility Pvt., a Bengaluru-based startup, will get state support to manufacture EV batteries that can store a total of 20 gigawatt-hours of power, the government said on March 24. Reliance Industries Ltd., the country’s largest conglomerate, will get subsidies for five gigawatt-hours.
The upstart is getting 40 per cent of the total capacity covered by New Delhi’s $2.4 billion in battery incentives over five years. The plan is to shave off $33 billion from the country’s fuel-import bill.
Paying firms to play has a checkered history in India: Favored companies invariably ask for protectionist cover. But with Brent crude oil at $120 a barrel, this particular gamble has some merit. Consumers are already shelling out too much at the pump because of high domestic taxes on gasoline and diesel. However, cutting the levies will only make the government’s pandemic-strained budget creak and groan. Hence, the desperate policy pushes to EVs.
There’s another goal behind giving money to battery makers, something that can’t be articulated in a government press release. The idea is to keep the nascent EV adoption as far away from Chinese technology and raw materials as possible so that India’s hydrocarbon dependence doesn’t metastasize into a different kind of geopolitical liability in the future.
“Today 90% of global capacity is in China,” Ola Electric founder Bhavish Aggarwal said on Twitter after winning state support. “We will reverse that and make India a global hub for EVs and cell tech.”
That’s a lot of chutzpah for a startup valued at $5 billion, based on its last $200 million funding round in January. Ola Electric, backed by SoftBank Group Corp. and Tiger Global Management, is tiny compared with Reliance, which is 45-times bigger in public markets.
The conglomerate is controlled by Mukesh Ambani, Asia’s richest man, who also owns the world’s largest oil-refining complex. Last year, he pirouetted to clean energy by announcing plans for everything from solar panels and batteries to green hydrogen and fuel cells. He committed $10 billion, but has already raised the investment target to $76 billion.
Yet, New Delhi is backing the lesser-known newbie. Aggarwal won incentives for the maximum 20 GWh that any one company was eligible to receive. Reliance also applied for the full quota, but was put on the waitlist for 15 GWh.
To show his commitment to R&D, Aggarwal has roped in Prabhakar Patil, a former chief executive of LG Chem Power Inc., the U.S.-based research arm of the world’s No. 2 EV battery maker, to the Ola Electric board.
Like Ambani, Aggarwal too has made a pivot. In 2011, three years after graduating with a computer science degree from the prestigious Indian Institute of Technology, he cofounded Ola Cabs, a ride-hailing app that competes in India with Uber Technologies Inc.
Last year he built – in record time – a “Future factory” that would be the world’s largest producer of electric scooters at full capacity, run entirely by 10,000 women and 3,000-plus robots. It’s had a bumpy start. The first product – the two-wheeler S1 Pro – initially got delayed, and then ran into bad press.
In February, Ola delivered 7,000 scooters, garnering a market share of nearly 9% among high-speed two-wheeler EVs, according to the research arm of Haitong International Securities Group.
India is at the cusp of an EV revolution. It won’t start in cars but in the scooters and motorbikes that are usually the first vehicles owned by a middle-class family.
by Daily News Sri Lanka
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