Ola’s sputtering India electric vehicle trial a red flag for Modi plan

Global automakers have repeatedly warned that India is not ready for electrification, saying the government must first lay down a clear, long-term policy, provide incentives to encourage manufacturing of electric vehicles. (Reuters)
Updated 09 March 2018

Ola’s sputtering India electric vehicle trial a red flag for Modi plan

NAGPUR, India: Indian ride-hailing firm Ola’s pilot project to test a fleet of electric vehicles in the western city of Nagpur was expected to herald a coming revolution in the Indian autos industry. So far, though, it has only exposed fractures in Prime Minister Narendra Modi’s ambitions to make all new vehicles electric by 2030.
With an initial investment of about $8 million, Softbank-backed Ola launched the project last year at an event that had all the trappings of a state function, including a big gathering and flagging off by Transport Minister Nitin Gadkari.
But nine months later, the program has hit a snag: Ola drivers, unhappy with long wait times at charging stations and high operating expenses, want to return their cars and switch to fuel-guzzling variants.
Out of 20 Ola electric car drivers interviewed by Reuters in Nagpur, more than a dozen said they have either returned their electric taxis and switched to diesel or are planning to do so.
Ola had said it would make 50 charging points available across four locations in Nagpur — a city of about 2.5 million people — for its fleet of 200 electric vehicles, but on a visit to the city in late January, Reuters found only about a dozen charging points. Ola has since added 10 additional charging points but is still short of its target.
Ola did not respond to requests for comment for this article.
Getting infrastructure built in the world’s biggest democracy where a not-in-my-backyard culture proliferates is a barrier for a lot of businesses in India. And it is proving to be the same for charging stations — Ola was forced to close one in Nagpur last year after protests by residents angered by traffic jams caused by drivers. It took more than five months to get government clearances to begin operating another station.
The hurdles faced by Ola in setting up sufficient charging stations for a fleet of expensive electric cars with a limited driving range expose the challenges the Indian government and automakers will face if they are to get anywhere near realizing the 2030 vision.
Global auto makers have repeatedly warned that India is not ready for electrification, saying the government must first lay down a clear, long-term policy, provide incentives to encourage manufacturing of electric vehicles to bring down their cost and create the charging infrastructure.
Gadkari added to uncertainty when he said last month that the government will no longer draft a separate electric vehicle policy. He did not comment on the 2030 vision.
The Ola project has not turned out to be economically viable for either the company or its drivers, said one industry source familiar with Ola’s strategy.
“The project’s not flying as of now and the economics is not working out,” the source said.
Electric car sales in India, one of the world’s fastest-growing auto markets, made up less than 0.1 percent of annual sales of more than 3 million passenger cars. The lack of demand is mainly because they are expensive — due to high battery costs — and as their range is limited and there isn’t a charging infrastructure.
By comparison, in China in 2017, electric vehicles made up about 2 percent of annual passenger car sales of 24.7 million.
The Indian government had been determined to promote electric vehicle use, starting with public transport and taxis, to combat rising pollution and reduce the nation’s dependence on imported oil.
India’s 2030 ambition was part of a broader move by countries like China and the United Kingdom, which have set similar goals. This has spurred billions of dollars in investments by carmakers like Volkswagen and Ford Motor even as many in the industry say they are unsure who will buy the massive numbers of electric vehicles governments want them to produce.
Mahindra & Mahindra is the only electric carmaker in India and the high cost of even its entry-level model, which starts at 760,000 rupees ($11,665) is a barrier for many first-time car buyers, and a non-starter for taxi drivers who can get a diesel or gasoline propelled car for about half the price.
Ola has deep pockets and while it has tied-up with Mahindra for the pilot project, its struggle to make the fleet viable in a small Indian city with much less congestion and space constraints than the biggest cities like Mumbai, underscores the magnitude of the challenges.
A shortage of stations and the limited range of cars — about 100 kilometers — has meant longer queues to recharge. During summer months when batteries discharge faster and need to be recharged more, the situation may worsen unless more charging points are added, said several drivers, none of whom wanted to be named as they feared retribution from the company.
The cars are owned by Ola and leased to drivers for 1,000 rupees a day, but many complain that the amount is too high and they need to work for 12-16 hours to make a decent living, given they waste 3-4 hours a day on charging.
One of the drivers said that after paying Ola the rent for the car and shelling out 500-600 rupees per day for charging, he is left with about 500 rupees ($7.71) at the end of a 14-hour day giving him little time to rest or spend with his family.
“If they don’t give us the (charging) facility, why should we drive these cars,” said the driver, who had just spent an hour waiting for his turn to charge the car and would have to wait for another 90 minutes while it charges.
Ola founder and CEO Bhavish Aggarwal said last April that the company would pilot a few thousand electric vehicles in several Indian cities in 2017 and then scale up in a major way. However, almost a year later it has still to take the experiment beyond Nagpur.
At India’s biennial auto show in February, electric cars took center stage but most were at a concept stage or sold only in global markets as automakers like Toyota, Honda and Renault took a circumspect approach to the new tilt toward electrification.
“Once we make an investment there are huge risks,” said Akito Tachibana, managing director of Toyota’s India arm, adding as of now there is no clarity on who would buy such cars and what incentives the government will offer.
Charging infrastructure is a big piece of the puzzle that needs to be resolved for EVs to be viable — India has only about 222 charging stations with 353 charging points, according to a January report by global consultancy EY.
Analysts estimate it costs between $500 and $25,000 to set up a station, and that comes on top of expensive land purchases needed to build them. The ministry of heavy industries estimates a subsidy worth 140 billion rupees ($2.2 billion) will be needed to promote EVs and charging infrastructure.
Automakers argue in the near-term the government should make land available and invest in building stations, while over the longer-term it would need to offer incentives to private investors.
One additional problem is that, unlike in Western countries, most car owners in India do not have garages, or formal parking where chargers for cars could be installed.
Another issue is lack of a long-term policy, outlining incentives, which has helped countries like China push electric vehicle sales. Government wrangling over policy formulation in India is making it difficult for carmakers to plan investments.
“Any distraction from the single-minded focus to draw a plan for introducing electric vehicles is going to make this a long-lasting exercise that might not attract the attention of the right kind of investors,” cautions Guenter Butschek, managing director at Tata Motors.


Egypt’s creative solutions to the plastic menace

Updated 24 August 2019

Egypt’s creative solutions to the plastic menace

  • Egyptian social startups are taking alternative approaches to fostering awareness and reducing waste
  • While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively

CAIRO: Global plastics production reached 348 million tons in 2017, rising from 335 million tons in 2016, according to Plastics Europe. 

Critically, most plastic waste is not properly managed: Around 55 percent of it was landfilled or discarded in 2015. These numbers are extremely concerning because plastic products take anything from 450 to 1,000 years to decompose, and the effects on the environment, especially on marine and human life, are catastrophic.

While initiatives around the world are taking action to combat this problem, some Egyptian projects are doing it more creatively.

“We’re the first website in the Middle East and North Africa that trades waste,” said Alaa Afifi, founder and CEO of Bekia. “People can get rid of any waste at their disposal — plastic, paper and cooking oil — and exchange it for over 65 products on our website.”

Products for trading include rice, tea, pasta, cooking oil, subway tickets and school supplies.

Bekia was launched in Cairo in 2017. Initially, the business model did not prove successful.

“We used to rent a car and go to certain locations every 40 days to collect waste from people,” Afifi, 26, explained. “We then created a website and started encouraging people to use it.”

After the website was launched, people could wait at home for someone to collect the waste. “Instead of 40 days, we now could visit people within a week.”

To use Bekia’s services, people need to log onto the website and specify what they want to discard. They are assigned points based on the waste they are offering, and these points can be used in one of three ways: Donated to people in need, saved for later, or exchanged for products. As for the collected waste, it is given to specialized recycling companies for processing.

“We want to have 50,000 customers over the next two years who regularly use our service to get rid of their waste,” Afifi said.  

Trying to spread environmental awareness has not been easy. “We had a lot of trouble with initial investment at first, and we got through with an investment that was far from enough. The second problem we faced was spreading this culture among people — in the first couple of months, we received no orders,” Afifi said.

The team soldiered on and slowly built a client base, currently serving 7,000 customers. In terms of what lies ahead for Bekia, he said: “We’re expanding from 22 to 30 areas in Cairo this year. We’re launching an app very soon and a new website with better features.”

Go Clean, another Egyptian recycling startup dedicated to raising environmental awareness, works under the patronage of the Ministry of Environment. “We started in 2017 by recycling waste from factories, and then by February 2019 we started expanding,” said founder and CEO Mohammed Hamdy, 30.

The Cairo-based company collects recyclables from virtually all places, including households, schools, universities, restaurants, cafes, companies and embassies. The customers separate the items into categories and then fill out a registration form. Alternatively, they can make contact through WhatsApp or Facebook. A driver is then dispatched to collect the waste, carrying a scale to weigh it. 

“The client can be paid in cash for the weight of their recyclables, or they can make a donation to a special needs school in Cairo,” Hamdy explained. There is also the option of trading the waste for dishwashing soap, with more household products to be added in the future.

Trying to cover a country with 100 million people was never going to be easy, and Go Clean faced some logistical problems. It overcame them by hiring more drivers and getting more trucks. There was another challenge along the way: “We had to figure out a way to train the drivers, from showing them how to use GPS and deal with clients,” said Hamdy.

“We want to spread awareness about the environment everywhere. We go to schools, universities, companies and even factories to give sessions about the importance of recycling and how dangerous plastic is. We’re currently covering 20 locations across Cairo and all of Alexandria. We want to cover all of Egypt in the future,” he added.

With a new app on the way, Hamdy said things are looking positive for the social startup, and people are becoming invested in the initiative. “We started out with seven orders per day, and now we get over 100.”