India-based electric vehicle (EV) manufacturer Ola Electric plans to launch its maiden electric car in 2024. However, the Softbank-backed company will face stiff competition and need significant investment in operational and technological capabilities to gain a foothold in the Indian market, says GlobalData, a leading data and analytics company.

Ola is set to compete with Tata Motors, MG Motor, Hyundai, and Mahindra and Mahindra, which are traditional car makers with optimized production capacity and supply networks. On the other hand, Ola is just starting from scratch and will require extensive investments to ensure quality, safety, efficiency and access to charging infrastructure to challenge the rivals.

Pinky Hiranandani, Principal Analyst of Thematic Research at GlobalData, comments: “Vehicle production in general is vulnerable to overcapacity and its associated reduction in profit margin. If Ola can withstand losses associated with setting up EV mass production, it could end up with a more efficient production line than its competitors in the medium to long-term, which could further support its ambitions.

“Established car makers can build EVs by modifying their existing combustion engine platforms to gain a cost advantage. Ola, therefore, must invest in strategic partnerships to overcome its inexperience in vehicle and battery manufacturing. It must also improve its brand image and build customer confidence in its electric cars.

“Ola’s EV journey has not been easy. It has struggled with battery and build quality issues, delayed deliveries, poor after-sale services, and fires. While Ola is attempting to carve out a niche in the Indian market, EV sales in the country accounted for less than 1% of overall vehicle sales in the fiscal year 2021-2022. High battery prices and inadequate EV charging stations are holding the Indian EV industry back. Ola must address these issues, and safety concerns with EVs to achieve its ambitions.”