IPO-bound Ola Electric suspends electric car project: Report

Founder Bhavish Aggarwal had announced in 2022 plans to unveil an electric sports car with an all-glass roof capable of reaching 100 km per hour in four seconds.

He reiterated these plans as recently as September 2023 in a Forbes interview, but sources indicate the project is now on hold ahead of the company's August IPO, which aims to raise approximately $660 million.

According to one source, Ola is prioritizing the two-wheeler market, including bikes, due to the need for more charging infrastructure in India before mass electrification can take off.

The suspension of the electric car project, which could have competed with Tata Motors in the emerging market, highlights the challenges posed by insufficient charging infrastructure.

E-scooters have gained popularity in India, with infrastructure developing rapidly. Around 483,000 e-scooters were sold by June this year, compared to about 45,000 electric cars in the same period.

One source mentioned that Ola's car project has been delayed for at least two years to focus on two-wheeler sales and battery production.

The company's IPO next month is expected to be one of India's largest this year.

Despite being loss-making, Ola has captured a 46% market share in e-scooters over three years, although it reduced its sales targets last year after the government cut some industry incentives.

Aggarwal had previously announced plans to build a new plant within its Tamil Nadu campus, with a capacity to produce 1 million electric cars annually.

The cars were intended to break the trend of small or midsized vehicles in India. Ola had engaged external consultants and hired over 100 employees for the car project, but 30% of the team has since left, with some members reassigned to new roles or projects.

The company had also initiated discussions with auto component suppliers and developed a prototype modelled after a BMW luxury sedan at its studio in the United Kingdom.