Ola Electric has announced a price cut of up to Rs 25,000 for its S1 scooter range.
CMO Anshul Khandelwal shares rationale behind the decision, in conversation with Tushar Deep Singh.
For the latest news and updates, visit ndtvprofit.com
CMO Anshul Khandelwal shares rationale behind the decision, in conversation with Tushar Deep Singh.
For the latest news and updates, visit ndtvprofit.com
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TVTranscript
00:00 [MUSIC PLAYING]
00:03 Hello, and welcome.
00:08 You're watching Profit Insights on Energy Profit.
00:10 I'm your host, Tushar Deepsingh.
00:12 Ola has cut prices of its S1 electric scooters
00:14 by up to 25,000 rupees.
00:17 So joining us today to discuss more on this
00:19 is Mr. Anshul Khandelwal.
00:21 He's the chief marketing officer of Ola Electric.
00:24 Mr. Khandelwal, welcome to Energy Profit.
00:29 Good to be here.
00:32 Yeah, hi.
00:33 So why the price cut, and why at this point of time?
00:37 And I think it's only applicable for February,
00:38 so are we looking at extension as well?
00:41 Yeah, so we have-- thanks, Tushar.
00:43 We have reduced the prices of our products
00:47 by up to 25,000, different across different price points,
00:51 in a push towards mass electrification and EV
00:54 adoption.
00:56 Why right now?
00:57 I think it's a testimony and shows
00:59 the strength of our unit economics and cost structures,
01:02 primarily because of our vertically integrated
01:05 technology and manufacturing.
01:07 We manufacture a lot of things in-house and at scale,
01:10 and with a very strong supply chain.
01:12 So a lot of these things combined
01:13 has obviously enabled us to ensure
01:15 that we give the right price to the consumer.
01:17 And we've always been at this mission
01:20 since we have started to amend the IC and ensure
01:22 that people adopt TVs.
01:24 And continuously, over a period of time,
01:26 whether it is through different product launches
01:29 or taking actions to solve the barriers for the consumers,
01:32 we've been doing so.
01:33 And hence, the decision on this also,
01:36 because upfront price is also one of the barriers
01:38 for the consumers.
01:39 OK, so Anshul, will we see an extension beyond February?
01:43 I think it's only 13 days left in the month.
01:46 As of now, it is still February.
01:48 OK.
01:48 OK.
01:49 [INAUDIBLE]
01:50 --on February.
01:50 But as of now, it is still February.
01:52 We have just announced today.
01:54 Yeah.
01:55 So is this an attempt to maybe shore up sales or reducing
02:00 inventory, so to speak, if you can shed some light on that?
02:03 What is the kind of inventory that you
02:05 have at this point of time?
02:07 No, not really.
02:08 It's not about inventory.
02:10 Our factory actually runs at full capacity.
02:13 There is overwhelming demand that we have.
02:15 The idea is to-- like I said, the idea
02:17 is very simple and more strategic in nature,
02:19 which is to solve for all the barriers for the consumers
02:23 and see how consumers adopt TVs.
02:25 Just two weeks back, we had focused
02:27 on solving other barriers, which was primarily product.
02:31 We had introduced a product 4 kilowatt hour.
02:33 Then we solved the barrier for battery,
02:35 which is eight years, 80,000 kilometers warranty, which
02:38 was pretty much one of the first in the industry.
02:41 We announced a service center network expansion
02:44 from 400 to 600 and announced 10,000 charging points.
02:47 So that point in time, it was more about one by one
02:50 we were solving for all the barriers.
02:52 And now, of course, we are solving this barrier as well
02:54 for the consumers and see how consumers
02:58 are encouraged to adopt TVs.
03:00 OK, so essentially, it's an attempt
03:01 to reduce the barriers that people may have
03:03 to adopting electric mobility.
03:06 So is there a subsidy component included here?
03:09 Is subsidy a chat?
03:10 I'm asking this question because Finance Minister Nirmala
03:13 Siddharaman actually announced an auto PLI scheme.
03:16 There has been some amount of fame to subsidy
03:18 that has also come in.
03:19 We know that their fame to subsidy
03:21 went away for electric scooters last June.
03:23 So is there any subsidy component in the price
03:26 at this point of time?
03:29 No, so as of now, fame holds, of course,
03:31 till 30th of March, 2024, as the government has said,
03:35 post which the government will decide what the fame subsidy is,
03:39 which we are not aware of.
03:40 But we are very confident whatever government does
03:42 is in the benefit of the industry and the consumer.
03:45 And as far as we are concerned, there
03:48 is cost structure because of vertically integrated
03:51 manufacturing technology supply chain, of course,
03:54 other subsidies and incentives which
03:57 we are eligible for as per the government policies.
04:01 OK, a final couple of questions to you, Anshul.
04:05 What is the trend that you're seeing on lithium ion battery
04:07 prices?
04:08 I'm asking this question because there was recently
04:10 a report from Goldman Sachs that the price of lithium ion
04:12 batteries may decline by almost 40% going up to 2025
04:16 from 2022 levels.
04:19 Also, Tata Motors recently--
04:21 I'm sure you guys are in different segments altogether--
04:24 but also said that they're reducing prices
04:26 to account for reduced lithium ion battery costs.
04:29 So what is the trend you are seeing
04:31 as far as lithium ion batteries are concerned, at least for you?
04:35 No, so I think that is applicable to everyone.
04:37 The lithium prices have been decreasing,
04:40 and hence the battery prices as a result.
04:43 And that is true for the entire EV industry.
04:46 So it's nothing specific to just two-wheeler or four-wheelers.
04:50 And as the benefits of the raw material,
04:53 and hence the component cost reduces,
04:56 obviously it adds to the overall cost structures
04:59 and makes the vehicle more affordable for people.
05:04 OK, finally, what all can customers
05:08 look forward from you, from Ola Electric going ahead?
05:12 Software upgrades, some accessories,
05:15 something on those lines.
05:16 So what should customers look forward to from Ola Electric?
05:20 No, I think we have given this--
05:22 sort of at least today, given this sort of belated valentine's
05:26 gift to the consumer.
05:27 Number one, that they should clearly look forward to.
05:30 Because consumers have been asking for this.
05:33 Two things that consumers want very clearly is, of course,
05:36 everybody wants higher rate and lower prices,
05:38 which is what we have done.
05:40 People wanted comfort on battery replacement and battery life,
05:44 which we had done.
05:46 People wanted to understand about charging infrastructure
05:48 and service, which we had announced.
05:49 So I think we have been listening to our consumers
05:52 and [INAUDIBLE] barriers one by one.
05:55 And we'll continue to do so as we go along.