Ola Electric’s CEO Bhavish Aggarwal Unveils Ambitious Plans for EV Scooter IPO in India by 2024

Ola Electric Mobility, the Indian startup that made a significant foray into the electric scooter market in late 2021, is now gearing up for an initial public offering (IPO) much sooner than anticipated by its founder. The remarkable pace of growth and success experienced by the company has prompted this strategic move.

Founder and Chief Executive Officer Bhavish Aggarwal, in a candid interview amid the lively atmosphere of New Delhi’s bustling Connaught Place, revealed that he initially estimated it would take four to six years of revenue generation before considering an initial public offering (IPO) for Ola Electric. However, he expressed his surprise at the accelerated pace of growth and maturity exhibited by the company since its entry into the electric scooter market in late 2021.

Sipping iced Vietnamese coffee, Aggarwal expressed his newfound confidence in the prospect of an earlier IPO for Ola Electric. The company’s remarkable journey has been characterized by a strong and positive market response, which has exceeded Aggarwal’s expectations. This overwhelming support from consumers and stakeholders has been instrumental in fueling Ola Electric’s rapid expansion and success in the electric mobility sector.

Ola Electric, backed by prominent investors like SoftBank Group and Tiger Global Management, has emerged as a frontrunner in India’s electric-scooter market, commanding an impressive 38 percent market share. Since its debut in the electric scooter segment in December 2021, the company has witnessed remarkable success, having sold over 239,000 electric scooters as per data from the Society of Manufacturers of Electric Vehicles.

According to 37-year-old Bhavish Aggarwal, dressed in a black Nehru jacket popularized by India’s first Prime Minister Jawaharlal Nehru and later, The Beatles, the demand for Ola Electric’s electric scooters initially stemmed from first-time scooter buyers. However, the company has now witnessed a shift in its customer base, with a majority comprising individuals who have fully embraced the concept of electric mobility.

Bhavish Aggarwal, with his sights set on ambitious growth, envisions expanding Ola Electric’s product portfolio in the coming years. The company plans to introduce a motorbike by the end of the current year, showcasing its commitment to diversifying its electric mobility offerings. Additionally, Ola Electric aims to introduce a battery-powered car in 2024, although the timelines for these ventures remain subject to adjustments as the company progresses.

The burgeoning demand for Ola Electric’s electric scooters in the Indian market has been a major focus, but Aggarwal is also keen on exploring international opportunities. The company has been considering exporting its electric scooters to regions like Southeast Asia, Latin America, and Europe. However, the strong domestic demand has somewhat delayed these plans, as Ola Electric prioritizes meeting the needs of the Indian market first and foremost.

In August 2021, there were reports that Ola Cabs had made progress in selecting banks for a potential $1 billion IPO in Mumbai. However, the IPO did not materialize at that time. Despite this, Bhavish Aggarwal, the CEO of Ola Electric, indicated that Ola Cabs has achieved profitability, representing a significant milestone for the company. As of the recent interview conducted in Delhi, Aggarwal did not provide any specific details on renewed efforts to list Ola Cabs or mention a potential date for an IPO.

Bhavish Aggarwal is making significant strides in the electric vehicle industry with the construction of a massive 115-acre battery factory in southern India. This strategic move positions Ola Electric to become a major player in the battery manufacturing sector, directly competing with Mukesh Ambani’s Reliance Industries, a conglomerate with diverse interests including energy.

Bhavish Aggarwal believes that Ola Electric’s decision to manufacture electric vehicle (EV) components in-house will have several strategic advantages for the company’s growth and success. As a graduate from the Indian Institute of Technology in Mumbai, Aggarwal’s engineering background informs his vision for the company’s future.

By producing EV components internally, Ola Electric aims to unlock the potential for selling cars on a larger scale. Owning the entire manufacturing process allows the company to streamline production, optimize efficiency, and reduce dependency on external suppliers. As a result, Ola Electric can scale up its operations and meet the increasing demand for its electric vehicles more effectively.

Indeed, achieving success in the electric vehicle (EV) segment in India presents significant challenges. Despite the growing global interest in electric cars, combustion-engine vehicles still dominate the Indian market, serving as the preferred mode of personal transport for most individuals.

According to data from BloombergNEF, EVs accounted for only 1.3 percent of the total passenger vehicles sold in India last year, representing a small fraction of the overall market. This underscores the current limitations faced by the electric mobility sector in India and highlights the need for targeted policies and initiatives to accelerate EV adoption.

As Ola Electric strives to make a mark in the competitive electric vehicle (EV) market in India, it faces strong competition from well-established manufacturers. Bengaluru-based Ola Electric is entering the arena alongside more experienced players, such as Tata Motors and Mahindra & Mahindra, both of which have a long-standing presence in the Indian automotive industry.

Ola Electric’s scooter business has encountered several challenges that have impacted its sales performance. One significant issue is the global chip shortage, which has affected the automotive industry worldwide. The scarcity of semiconductors has led to delivery delays for Ola Electric’s electric scooters, disrupting production and sales.

In June, Ola Electric experienced a notable decrease in sales, with a 39 percent slide from the previous month, selling 17,590 units. This decline in sales is part of a broader trend that affected other automakers in India as well. The decrease in sales came after the government trimmed subsidies that were previously offered under the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) program.

Bhavish Aggarwal emphasizes the significant role of technology in accelerating product development timelines. He highlights that advancements in technology have allowed Ola Electric to reduce the time it takes to bring a product to market. By leveraging digital simulation and artificial intelligence (AI) in the manufacturing process, the company has streamlined operations and achieved greater efficiency, resulting in faster production and delivery.

Bhavish Aggarwal’s emphasis on maintaining a flat organization structure contributes significantly to expediting the production process at Ola Electric. In a flat organization, there are fewer hierarchical layers, and decision-making is more decentralized. As the CEO, Aggarwal is actively involved in daily decision-making, allowing for swift and agile responses to challenges and opportunities.

With about 7,000 employees, Ola Electric’s flat organizational structure promotes a collaborative and inclusive work environment. It facilitates cross-functional collaboration and enables teams to work seamlessly together towards shared goals, reducing communication gaps and delays.

Bhavish Aggarwal’s commitment to rapid execution and efficient decision-making is evident in his philosophy at Ola Electric. He emphasizes that the company’s ability to achieve tasks in a remarkably short timeframe sets it apart from traditional organizations. In Ola Electric’s dynamic and agile approach, what might typically take a month to accomplish in other companies is accomplished within a day.

In making the statement, “Tesla is for the West, Ola is for the rest,” Bhavish Aggarwal is highlighting the different target markets and strategic focus of Tesla and Ola Electric.