The founder of ride-sharing group Ola said granting special incentives to Tesla in India was not be in the best interests of the country, as New Delhi works to accelerate the growth of homegrown champions in the electric vehicle sector.
Bhavish Aggarwal, the chief executive of SoftBank-backed Ola, is pushing into the country’s nascent electric vehicle market as the country of 1.4bn people embraces renewable energy to curb fossil fuel emissions.
Ola, along with a handful of other companies including Mukesh Ambani’s Reliance Industries and Hyundai, recently won a tender under India’s $2.4bn programme to boost local battery cell production.
“Tesla is free to come in and put up shop here and sell its cars,” Aggarwal told the Financial Times. “They just want to be treated differently from others, which I believe is not in the interests of India.”
Tesla has not started manufacturing operations in India. Founder Elon Musk tweeted in May that “Tesla will not put a manufacturing plant in any location where we are not allowed first to sell & service cars”. Musk did not reply to a request for comment.
Musk’s electric vehicle company has enjoyed tremendous success in China, where it helped develop a nascent industry. In return, Beijing offered the company incentives, including tax breaks and low-interest loans.
Although Maruti Suzuki, a subsidiary of Japan’s Suzuki, sells more passenger cars than any other company in India, many foreign automakers have struggled in India.
In September, US carmaker Ford decided to stop manufacturing in India after its top directors in India were granted bail in an alleged cheating case and after years of heavy operating losses.
Prime minister Narendra Modi’s government has pushed a “Make in India” policy and encouraged homegrown alternatives over foreign companies.
Since Ola launched in 2010 as a ride-hailing app, it has expanded into other services, such as deliveries, used-car sales and selling insurance.
It founded Ola Electric, an electric mobility company, in 2017, buying Dutch electric scooter start-up Etergo in May 2020 for an undisclosed sum. The company is now India’s biggest producer of electric scooters, with total sales of over 50,000.
It competes against India’s top conglomerates in the electric vehicles sector. Tata Motors has manufactured and sold electric cars since 2019, though the market remains small and sales average around 3,000 a month, according to the company.
Ola began deliveries of its first rechargeable scooters in December 2021, with thousands of customers reserving scooters in July. But after one scooter caught fire in March, Ola recalled the batch of 1,400.
Aggarwal called the incident “isolated”, adding: “In very, very rare cases this can happen as have happened with other manufacturers of other EVs.” He said Ola was co-operating with a government investigation launched in March into electric scooter fires.
He played down a string of high-level exits from across the group, including its chief operating officer last October. “We have a very strong management layer across both our companies,” Aggarwal said.
Aggarwal’s plans to take Ola public this year have also been set back, as global tech valuations tumble with the US Fed raising interest rates.
“My efforts are to take it IPO within the next one-year rough timeline,” Aggarwal said. “But again, it can move up and down, the markets are volatile.”
Additional reporting by Richard Waters in San Francisco
Read the full article here