Carmakers Hyundai Motors and Kia Motors have announced that they are going to invest to the tune of $300 million in cab aggregation service provider Ola. This is their largest combined investment to date.
As part of the strategic collaboration, the companies have agreed to co-create solutions to operate and manage fleet vehicles, marking the Group’s first foray into the EV industry, as they expand operations from automobile manufacturing and sales to total fleet solutions. The partnership will offer Ola drivers various financial services, including lease and installment payments, while vehicle maintenance and repair services are expected to enhance customer satisfaction.
Hyundai, Kia, and Ola have also agreed to coordinate efforts to develop cars and specifications that reflect the needs of the ride-hailing market (both users and drivers). Data accumulated during service operation will allow the companies to make constant vehicle improvements to meet local needs and specifications better.
Hyundai Motor Group expects to accelerate its transition from a ‘car manufacturer’ into a ‘smart mobility solutions provider,’ as the partnership’s initiatives will allow it to engage in all aspects across the entire mobility value chain ― including vehicle production, fleet operation, and mobility services.
Ola aims to create over two million job opportunities in the mobility ecosystem by 2022.
The agreement will see the three companies extensively collaborate on developing unique fleet and mobility solutions; building India-specific electric vehicles and infrastructure; as well as nurturing best in class opportunities and offerings for aspiring driver partners with customized vehicles, on the Ola platform.
“India is the centerpiece of Hyundai Motor Group’s strategy to gain leadership in the global mobility market and our partnership with Ola will certainly accelerate our efforts to transform into a Smart Mobility Solutions Provider,” said Euisun Chung, Executive Vice Chairman of Hyundai Motor Group in a media statement.
Bhavish Aggarwal, the co-founder, and CEO of Ola said, “This partnership will also significantly benefit driver-partners on our platform, as we collaborate with Hyundai to build vehicles and solutions that enable sustainable earnings for millions of them, in the time to come.”
The EV market is expected to grow in the double digits until the year 2020 as stricter emission norms are implemented on petrol and diesel vehicles. An increasing number of e-mobility firms are turning towards EVs. Mahindra &Mahindra recently started a pilot run of 10 EVs in Mumbai to gauge the market.
Recently, Ola Electric Mobility raised a sum of ₹400 billion ($56.4 million) led by several of Ola’s early investors including, Tiger Global and Matrix India and others, as part of its first round of investment.
Just a few days ago, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the proposal for setting up a national mission on transformative mobility and battery storage initiatives.
Apart from this, the Cabinet has also approved the creation of Phased Manufacturing Program (PMP) to support the development of large-scale, export-competitive integrated batteries and cell-manufacturing giga-scale projects in India.
Last month, the Ministry of Power also proposed a plan to develop electric vehicle infrastructure across 70 cities and 20 highways in the next five years between 2020-25 at the cost of ₹50 billion (~$700 million).
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.