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After Ola, Uber ready to jump on electric car bandwagon in India with M&M

With this venture, Uber has joined local rival Ola, backed by Japan's SoftBank Group, which earlier this year launched a pilot for electric cars in the western city of Nagpur and is planning a large-scale roll-out by next year.

BT Online   New Delhi     Last Updated: November 24, 2017  | 17:19 IST
After Ola, Uber ready to jump on electric car bandwagon in India with M&M

The government's ambitious plan to convert the entire vehicle fleet in the country to electric by 2030 has started bearing fruit with some of the world's best auto companies like Suzuki and Toyota already announcing their plans to spearhead India's electric mobility programme. Ready to grab a piece of the pie of the world's fifth largest auto market is ride sharing company Uber, which will partner with Mahindra and Mahindra to introduce electric vehicles on its platform in India.

Madhu Kannan, the company's chief business officer for India and emerging markets, told reporters in Mumbai on Friday that Uber would deploy hundreds of electric vehicles in Delhi and Hyderabad by March next year and would consider expanding the pilot to other cities.

Earlier this month, Japanese auto giants Toyota and Suzuki had also announced to work collaboratively to introduce electric cars in India by 2020. State owned Energy Efficiency Services Ltd, which is spearheading the government's electric mobility programme in India, is planning to come up with a fresh tender of 10,000 units by the end of this fiscal year. In August, it came out with its first tender of 10,000 vehicles. The first phase of 500 vehicles is being supplied by the two successful bidders - Tata Motors and Mahindra and Mahindra. 

"For how long this pilot will go on is difficult to predict ... It will require adequate progress in engagement with our stakeholders before we plan to expand to other cities," Kannan said, adding that Uber so far has no major roll-out targets for electric vehicles in India.

With this venture, Uber has joined local rival Ola, backed by Japan's SoftBank Group, which earlier this year launched a pilot for electric cars in the western city of Nagpur and is planning a large-scale roll-out by next year. India is working on a new policy for electric vehicles but the auto industry is skeptical about its success due to the high cost of batteries and lack of charging infrastructure, which they say could make the whole proposition unviable.

Electric car sales in India, one of the world's fastest-growing car markets, are negligible compared with annual sales of over 3 million petrol and diesel cars last fiscal year, industry data showed. But the government is determined and plans to push the use of cleaner technology vehicles through public transportation.

"Our collaboration with Uber is an important next step to help accelerate the large scale adoption of electric vehicles on share mobility platforms and meet the nation's vision for EVs," Mahindra's managing director, Pawan Goenka, said. As part of the deal, Uber will initially subsidise the cost of electric cars for its drivers and Mahindra will also provide finance, insurance and after-sales service. The two companies will also work with public and private firms to set up charging stations for the cars in Hyderabad.

Mahindra has previously said it would invest Rs 6 billion over the next two to three years to develop electric vehicles. The carmaker is currently working on two electric passenger vehicles, including one with its South Korean unit Ssangyong Motor Co, Goenka said. Mahindra also has a partnership with Ola in which the ride-hailing company agreed last year to procure 40,000 vehicles, including electric variants.

With Reuters inputs

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