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Did Ola, Okinawa's Strategy To Launch EVs Ahead Of Legacy Players Backfire?

There is one prominent thread running through all the incidents—how quickly these young start-ups rolled out their vehicles one after the other

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Electric Scooters

Over the past few months, India has witnessed eight electric two-wheelers go up in flames, claiming three lives and injuring several others. The videos of the blazing two-wheelers, belonging to brands like Ola, Okinawa and Pure EV, have since gone viral, with the latest brand to join the cohort, Nashik-based Jitendra EV, witnessing 20 of its electric scooters on fire after being loaded onto a transport container.

There is one prominent thread running through all the incidents—how quickly these young start-ups rolled out their vehicles one after the other. While Okinawa and Pure EV were both established in 2015, cab aggregator Ola’s foray into the space via Ola Electric Mobility came about only in 2017.

In a bid to dominate the budding electric vehicle space before legacy players entered the race, the start-ups dealing with electric vehicles (EV) decided to put their best wheels forward, as fast as they could. The fire incidents, however, show a concerning trend.

“The fires are witnessed more in the EVs owned by start-ups as compared to those owned by legacy automobile companies. I feel these start-ups just rushed to launch EVs in the market. They might have thought that if they do not launch the vehicle right now, they will lose that opportunity,” says an EV engineer working with TVS Motor on the condition of anonymity.

More Haste, Less Speed

Any new technology that needs to be launched in the market, especially in the automobile industry, requires research and development (R&D) of at least 10 years, says a combustion engineer. “The duration between the R&D and the launch of the electric vehicles depends upon the category of vehicles and the testing standards followed by the company. All automobiles need to pass the minimum criteria set up by the Automotive Research Association of India (ARAI) before launching any vehicle in the market.” explains the TVS Motor engineer, adding that it takes approximately two to four years to launch an electric two-wheeler and a minimum of six years to launch an electric four-wheeler.

While the start-ups seem to have dived into the segment first, the legacy players are measuring every step along the way. Hero MotoCorp, India’s largest two-wheeler maker, first announced its venture into the electric scooter segment in 2016 by partnering with Bengaluru-based start-up Ather Energy. Earlier that year, it had displayed an electric scooter Duet-E at the New Delhi Auto Expo.

“Hero MotoCorp has a three-pronged approach for EVs. First through internal projects at its R&D hub, second through Hero Hatch, its internal incubation centre, and third through collaboration with external entities,” says Bharatendu Kabi, head, corporate communication, of Hero MotoCorp.

Six years after entering the space, the automaker launched a new brand for its emerging mobility solutions- Vida in March 2022. The company has its R&D at Hero’s Centre of Innovation and Technology in Jaipur and the Hero Tech Center near Munich in Germany. The first product from Vida will be an electric scooter, which will be launched in July this year.

In contrast, Gurugram-based Okinawa announced its plan to launch its first electric scooter in 2015 and launched it in 2018.

In Ola’s case, the company acquired Etergo, an Amsterdam-based electric scooter start-up, also known as the “Tesla of scooters”, in 2020. It subsequently announced a Rs 2,400-crore investment in the same year, which was directed towards setting up its first electric scooter facility in Tamil Nadu to manufacture at least two million EV units under its Hypercharger Network programme.

Within a year, when Ola announced plans to launch its Ola S1 and Ola S1 Pro electric scooters on August 15, 2021, more than one lakh units were pre-booked within 24 hours. Surprisingly, the cab aggregator did not mention the time taken by the company on the R&D aspect of the vehicle anywhere while it was gung-ho about the launch.

“Ola is a cab aggregator. I am surprised the company launched electric vehicles so fast. Usually, technologies like EVs require a lot of research and development. It also requires certain amounts of tests to be done before the launch of new products,” says Isaac Alpheus, an automotive engineer.

On the other hand, Ather Energy feels that it has given enough time to its R&D team, which has given its EV products an advantage in the market. Ravneet Singh Phokela, its chief business officer, says, “From concept to limited commercial production, it took us a solid five years from 2013 to 2018. And even then, we sold in just Bangalore and Chennai in limited quantities, because we wanted to do extensive field testing before we scaled up. Our true scale up began in October 2020, with the Ather 450X and 450 Plus. There is absolutely no substitute to spending time in the design and validation phase, testing the vehicle across a variety of use cases, testing it in the real world, and then scaling production.”

No Smoke Without Fire

The TVS Motor engineer explains how automobile companies have to conduct several levels of testing at lateral, central and component stages for each EV component before giving the vehicle a green signal. Even in terms of the batteries used in EVs, generally lithium-ion batteries, different types of tests are carried out. “That appears to be neglected before launching the vehicle in the market,” the engineer says.

The ARAI mandates EV manufacturing companies to perform tests on battery performance, safety, electric motor characterisation, vehicle performance and other aspects.

Here is the point of concern. Days before the launch of its first set of electric vehicles—S1 and S1 Pro—Ola had failed its battery performance test. A news publication had reported that of the 100 electric vehicles produced at the company’s manufacturing facility, many failed the test. (Outlook Business reached out to Ola and Okinawa on the issue on the issue of their scooters catching fire, but did not hear from the companies before the report went to press.)

“It boils down to how well-prepared and reliable your product is. If the product is not reliable, it is going to fail. And, if you are going to launch it without testing, it is a liability,” says Rohit Grover, CEO, Aerostrovilos Energy.

Grover attributes the fires to the lack of R&D and testing. “You (companies) can try to use cheaper products to save cost or you can try to reduce your R&D to bypass it because the regulations do not require it. You are just bypassing the law because you want to launch the product in the market,” he says.

Karthik Anantha, head of R&D, Omega Seiki Mobility, says that more than launching a product, it is the history and the testing reports that matter. “Initially, electric scooters in India were dependent on lead-acid batteries. At that time, there were hardly any fire incidents, But now, we are dependent on lithium-ion cells. So, we are shrinking the entire battery pack. The battery pack, which used to weigh around 122 kilogrammes is now around 40 kilogrammes. The energy density has increased. It has become more powerful. It is all dependent on the battery management system,” he says, adding that when you have too much energy readily available, controlling that energy is what matters.

Action Reaction

Following the fire incidents, the government also warned of strict action against EV companies that were found to be negligent. “If any company is found negligent in their processes, a heavy penalty will be imposed and a recall of all defective vehicles will also be ordered,” Union minister Nitin Gadkari had said in late April, adding that companies could also take advance action to recall all defective batches of vehicles immediately. He said that while announcing the constitution of an expert committee to look into the incidents and make recommendations on remedial steps.

Subsequently,  Ola, Okinawa and Pure EV recalled at least 6,656 units—Okinawa recalled 3,215 vehicles, Pure EV 2,000 and Ola 1,441.

The government had also asked the EV makers to halt the launch of new vehicles until the reason behind EV fires was not clear. 

A Test Of Batteries

The EV engineer quoted above says that poor battery management system, usage of cheap products to save cost, short-circuit in the vehicle, miscommunication of the vehicle communication system and usage of unstandardised software by the company also lead to EV fires.

“The prime reason for EVs catching fire is thermal runaway. The conception of high temperature causing battery packs to explode is flawed. While high temperatures do have a bearing on battery performance, health and life parameters, they do not lead to any explosions,” says Nitish Arora, lead, Natural Resources Defense Council.

To avoid instances of thermal runaway, original equipment manufacturers (OEMs) need to get the right cell quality, robust battery management system, built-in thermal cooling systems and tailor battery pack design to suit Indian road conditions, he says.

Bengaluru-based Ather Energy says that batteries should be designed specifically for the harsh and demanding Indian conditions, as the cells that are used in EV batteries are designed for countries with colder climates and OEMs should also invest enough time and effort in on-road testing before they start commercial production. Phokela says, “A well designed battery is the most critical aspect of an electric vehicle from the perspective of safety. Battery catching fire is essentially a question of quality, engineering and manufacturing gaps. It is important that OEMs invest in understanding the market and engineering and make in India for India. Foreign products are designed for a different kind of climatic conditions and usage compared to India.”

Suhas Rajkumar, founder and CEO of Bengaluru-based EV start-up Simple Energy, agrees with Phokela and says that years of dedicated R&D is needed to solve these ever-prevalent issues. “I do not expect existing options to get better or safer unless there is a recall. Future products are likely to be subjected to higher scrutiny by third-party and government agencies, which will invariably lead to better vehicles being launched in the market,” he says.

Speaking about the need for special focus on the designing of the battery pack, battery management system, electrical connectivity and cell management within the pack, Madhumita Agrawal and Dinkar Agrawal, co-founders of Bengaluru-based electric mobility start-up Oben Electric, feel that there should be EV-grade cells to work along with automotive-grade components. “An understanding of its application, usage, composition, harmonious balance of elements, battery structure, cell type and adaptability to different demographics as well as geographies requires years of expertise, spot-on technical know-how and last-mile appropriate handling," they say.

Aerostrovilos’s Grover points out that companies with good R&D and support will not have any problem in selling their products and a customer-focused product is the only thing that will be successful.

With the government closely watching and legacy players eager to capitalise on the bad press EV start-ups are getting, the EV two-wheeler segment may throw up new leaders in the coming months. The government, in the mean time, could do well to create and enforce battery standards before EV models are launched in the market rather than waiting for corrective action after an untoward incident has taken place.
 

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