Ola Electric has commenced bookings for its electric scooter. Consumers can reserve an Ola Scooter for as low as ₹499 ($6.6). What’s more, one can modify the order or get a full refund on cancellation. In short, the deal looks mouth-watering and it is likely to attract potential consumers, say analysts.
“Maharashtra has an early-bird incentive (valid till 31 December) of ₹15,000 and potential customers may want to get ahead in the queue by booking their Ola Electric to avail the extra incentive,” said Nomura Financial Advisory and Securities (India) Pvt. Ltd analysts in a note on 15 July.
Shares of incumbent auto firms were unperturbed by this development. For perspective, shares of TVS Motor Co. Ltd, Bajaj Auto Ltd and Hero MotoCorp. Ltd closed marginally higher on Friday on the NSE.
“As seen globally, success of startups could see rapid increases in their market values, while at the same time, incumbent OEMs (original equipment manufacturers) could see de-rating if they don’t launch compelling products,” said Nomura’s analysts.
Of course, incumbents are upping their ante on this front. It helps here that the government has hiked incentives for electric two-wheelers (e-2W).
In a report last month, Ambit Capital Pvt. Ltd analysts said, “By FY26, capital cost of electric two-wheelers (e-2Ws) and petrol 2Ws should be equal, resulting in about 30% lower total cost of ownership for e-2Ws.”
Note that the auto industry’s e-2W volumes for FY21 at 143,837 units represent penetration levels below 1%. Of course, this measure is expected to increase.
“This could improve to 5-10% over the medium term with falling EV prices due to the reduction in battery costs, localization efforts and scale benefits. Large listed OEMs (Hero, TVS and Bajaj) are positioning themselves to benefit from the anticipated EV adoption,” said Emkay Global Financial Services Ltd’s analysts in a note on 16 July. They added, “However, considering competition from other OEMs (Hero Electric, Ola Electric, Okinawa, Ampere, etc.), we expect some pressure on market share and margin in the medium term.”
To be sure, it remains to be seen if the initial booking reservations for the Ola e-scooter would eventually translate into actual sales. Much depends on the final price and if that is high, then customer interest could wane.