South Korean automobile major Hyundai Motor on Tuesday said it is investing $300 million in ride-hailing service provider Ola, identifying India as the centrepiece in its strategy to gain leadership in global mobility market.
The investment will be jointly made by group firms — Hyundai Motor Company and Kia Motors Corporation — and under a tripartite agreement with Ola, the companies will jointly develop the electric vehicles (EVs) ecosystem and fleet services for global markets.
Under the partnership, the three firms will also aim to develop EVs and charging infrastructure customised for the Indian market, the companies said in a joint statement.
This will be the biggest combined investment till now by the two automobile companies.
The development highlights Ola’s increasing focus on electric mobility.
Ola’s e-vehicle solutions business, Ola Electric Mobility, earlier this month had raised `400 crore from Matrix Partners India and Tiger Global, among other investors, which was the first independent round of investment that Ola’s electric mobility unit has raised. This investment came after the company had announced its plan last year to bring 1 million EVs to Indian roads by 2022. Ola had also in February secured a funding of `650 crore from Flipkart co-founder Sachin Bansal along with other investors, including existing ones like Steadview Capital and a cohort of US-based investors. Commenting on the development, Hyundai Motor Group executive vice-chairman Euisun Chung said, “India is the centrepiece 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.”
Hyundai Motor expects to accelerate its transition from a car manufacturer to a smart mobility solutions provider, as the partnership initiatives will allow it to engage in all aspects across the entire mobility value chain including vehicle production, fleet operation and mobility services, the Korean firm added.
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Hyundai has already invested in car-sharing start-up Revv, which had last year raised `100 crore in a new funding round led by the auto major.
Revv plans to plans to increase its geographical footprint to 30 cities from 11 cities in India within a year.
Starting this month, Hyundai Motor India has launched a pilot project offering customers to experience its products through a subscription model in partnership with Revv. The initiative will cover six cities — Delhi-NCR, Mumbai, Kolkata, Pune, Bengaluru and Hyderabad.
As part of the investment in Ola, the group said the companies have agreed to co-create solutions to operate and manage fleet vehicles, marking Hyundai’s first foray into the industry as they expand operations from automobile manufacturing and sales to total fleet solutions.
Ola co-founder and CEO Bhavish Aggarwal said the partners will bring to market a new generation of mobility solutions, and constantly expand their range of offerings for consumers.
“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,” he said.
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), the statement said.
The partnership will also look at supporting micro-entrepreneurship opportunities by providing access to customised Hyundai and Kia vehicles as well as financing and insurance benefits for driver-partners.
Under the agreement, the three companies will also extensively collaborate on developing unique fleet and mobility solutions, building India-specific electric vehicles and infrastructure, the statement said.
Besides, it will also offer aspiring driver partners customised vehicles on the Ola platform, it added.
The partnership will offer Ola drivers various financial services, including lease and instalment payments, while vehicle maintenance and repair services are expected to enhance customer satisfaction, it added.