Government to push ride-hailing platforms Ola, Uber to convert 40% of their fleet into electric.

Key Highlights

This move comes as a part of the government’s commitment to the Paris climate treaty of 2015.

Government plans to propose this change so as to stop relying on oil imports and also to control the rampant air pollution in the country.

The officials also proposed that only electrical vehicles be sold for commercial usage from 2026.

In an effort to replace petrol and diesel vehicles currently on road with more environment-friendly electric cars, the government will soon order cab aggregators like Uber and Ola to covert 40% of their existing fleet into electric vehicles. This move comes as a part of the government’s commitment to the Paris climate treaty of 2015. It hopes to boost the popularity of electric vehicles on road in India.

The recommendation for this switch came from NitiAayog officials and the ministry for road transport, renewable energy, power and steel. Other departments related to trade and heavy industries also backed the suggestion during a meeting that took place in Delhi on 28^th May. The officials also proposed that only electrical vehicles be sold for commercial usage from 2026.

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The Cab companies will be required to act upon this order from as early as the next year so as to achieve electrification of 2.5% in the next year, 5% as of 2022. 10% in 2023 and finally reaching the proposed 40% in 2026.

Government plans to propose this change so as to stop relying on oil imports and also to control the rampant air pollution in the country. China is also in the process of making similar efforts having set even tougher targets and providing generous subsidies funded by the state for the consumers that buy greener products.

However, the challenge for India is tough as electric vehicles constitute only a minuscule portion of the cars sold in the country. In comparison to 3.3 million petrol and diesel cars sold in 2018, only 3,600 electric cars were sold.

Bangalore based Ola has always been an advocate of using electric vehicles. It made its first foray into the EV market by starting an EV fleet in Nagpur in 2017. They had even made an initial investment of $8 million (₹55 Cr) in the same. However, this project failed to take off and failed in just 9 months because of the dissatisfaction of the drivers.

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However, this failure didn’t deter Ola in its efforts to go electrical. Ola electric subsidy was set up by it in March. The company also raised a capital of $56 million from Matrix India and Tiger Global. This investment followed a $300 million investment from Hyundai motors and Kia motors. Apart from these investors, Ratan Tata has also invested an undisclosed amount in Ola Electric. The company further appointed ArunSarin who is the ex- CEO of Vodafone group to see Ola Electric becoming a success.

This new government order can breathe fresh air into Uber that is currently struggling hard against its rival Ola in India. The company doesn’t have any new electric projects in store as of now barring the announcement of a pilot project of collaboration withYulu last month. The cab company is partnering with Yulu to fulfil short distance journeys. Yulu won’t be integrated into the Uber app but the app will redirect the users to Yulu’s registration page so that they can book electric bicycles from there.

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