Ola's stellar e-scooter booking numbers: What's behind the demand, and what it means for industry

Ola Electric announced on Friday it has sold over Rs 1,100 crore worth of electric scooters in the two-day purchase window. Co-founder Bhavish Aggarwal termed the sale as an unprecedented event for the company and the auto industry.

"In total over two days, we have done over Rs 1,100 crores in sales. This is unprecedented not just in the automotive industry, but it is one of the highest sales in a day (by value) for a single product in Indian e-commerce history!" he wrote in a blog post.

On August 15, the company unveiled its Ola S1 electric scooter in two variants -- S1 and S1 Pro -- at Rs 99,999 and Rs 1,29,999, respectively (ex-showroom including FAME II subsidy and excluding state subsidies). The scooter comes in 10 colours with an in-house developed 8.5 KW motor and 3.97 kWh battery packs.

Also Read: Ola electric scooter sales crossed Rs 1,100 cr in 2 days, says co-founder Bhavish Aggarwal

Ola Electric had opened pre-launch bookings of its electric scooters in July for Rs 499 and had received 1 lakh orders in just 24 hours. However, the company has not disclosed how many orders it has received so far.

What's driving the demand?

India's two-wheeler EV story has a startup-like trajectory of hype, fall and growth.

During the first boom from 2009-12, a number of fly-by-night operators mushroomed across major cities offering Chinese assembly products, at ridiculous prices in some cases.

They repackaged electric bicycles (not electric motorcycles/scooters) and sold them as substitutes to motorcycles, which crashed the market and damaged consumer confidence significantly. They were fundamentally incompetent products, hugely discrediting the category as a whole.

However, a few early players like Ampere EV, Hero Electric, Electrotherm stood the storm, battled the wave and sustained losses for a few years before they could rebuild from scratch. By that time, the fly-by-night operators had already disappeared.

Things have changed over the years, the EV ecosystem is very active today, and the supply system for components is quite welcoming to EV players from India. 

It's at this juncture that Ola came with a whole different order of capital and investment into the business. It has massively changed perceptions and has been able to get enough partners to believe in its story while the government too pushed the EV narrative. 

Also Read: 'Revolution': Ola selling 4 e-scooters per second, says Bhavish Aggarwal

Ola managed to bring on board multiple partners to solve several adjacent problems as against players earlier trying to solve all problems by themselves, which slowed down the processes.

Ola being a popular ride-hailing network and a unicorn with global marquee investors onboard commands a greater level of visibility and brand recall than any other EV player in the market.

Moreover, for cost-conscious Indian customers, two-wheelers have always been a viable mode of transport. In the personal commute segment, the average drive distance is about 17-20 km a day which for an EV can be managed by a charging unit at home without the need for a large public charging network.

As EV's inherent issues such as range anxiety and charging infrastructure are being addressed, Ola's marketing prowess could make users believe that its rightly priced e-scooter can be a better alternative to their daily commute as the fuel prices are soaring high with every passing day.

The pent-up demand and the hype Ola managed around a two-day event also helped it attract such large bookings.

What the demand means for the industry

While Ola's success depends on its production capabilities and abilities to keep its promises, the hype it has created and its potential success in leading this revolution will transform the EV industry in India.

First, as Ola and other EV makers position themselves as global producers, it offers a unique opportunity for the country to become the EV manufacturing hub for the world. 

The recently announced Rs 26,058 crore PLI scheme for the automobile sector and drone industry is expected to bring in investments of over Rs 42,500 crore in five years and lead to incremental production of over Rs 2.3 lakh crore. 

The scheme will incentivise the global supply chain for advanced automotive technologies and enable the country to shift to environmentally cleaner electric vehicles.

Besides, about 20 states have come out with EV policies and are rolling out incentives to attract EV manufacturers into the state and popularise EVs as preferred vehicles.

Also Read: Ola sold e-scooters worth Rs 600 cr in a day, says Bhavish Aggarwal

"Ola would want to position itself as the largest manufacturer of electric vehicles, two-wheelers to begin with at least, and look at export as a key market beyond the domestic consumption.. From a government push standpoint, bet it the FAME policy and incentives, all these things are moving in a positive direction for a customer to also realise it's not only the manufacture who is serious about the business, but the government is equally serious and want to make this revolution happen," Saket Mehra, partner, Grant Thornton Bharat, said.

Many global players strategising to de-risk themselves by not relying on a single country for importing EVs, and India becomes a very preferred option as Ola takes the narratives beyond the borders.

The opportunity is also expected to force legacy players, with a strong brand presence in global markets, to introduce their products to their international markets.

"This demand will make conventional IC players become more serious about EVs if they aren't already. They were so far reluctant to promote EVs too much because they feared it would impact their existing IC vehicle segment.

They will now realise it is inevitable, and that rather than fighting a losing battle, it's better to go aggressive on their EV bets," Subhabrata Sengupta, executive director, Avalon Consulting said.

"India has really outdone China in two-wheeler manufacturing, for local markets and global. Indian players have nailed that balance of quality and cost in the two-wheeler space. In the EV two-wheeler market, India has the capability to lead. This is a reset. EVs are heavy on electronics and software, and that's something we are very good at," Arun Vinayak, founding partner and former chief product officer, Ather Energy, said.

The EV revolution will also make India transition from predominantly a bike nation to a scooter nation and that will force traditional players to rethink their strategies and invest more in the EV space.

"90% of the two-wheeler market is going to become scooters very soon. It happened in Europe and in Taiwan. Two-wheelers are increasingly looked at as a vehicle that everyone in the family can share, men and women, old and young. It is also more convenient and has become better in terms of performance. Bikes will reduce to the big segment 300-500 cc, mostly for hobbyists," Vinayak said.