How EV brands should douse the fire

Managing a crisis maturely will not only mitigate damage and protect a brand's reputation from going up in flames, but also help define the course of the brand in a positive way

By Lloyd Mathias

Published: Mar 30, 2022 12:45:47 PM IST

Updated: Mar 30, 2022 02:39:15 PM IST

While the EV market is exploding, safety concerns need to be addressed as the top-most priority. Image: Samyukta Lakshmi/Bloomberg via Getty Images

The video of an Ola electric scooter catching fire in Pune went viral last week. There are three key takeaways for entrepreneurs, investors and crisis managers from it.

One, EVs are 'EV'olving. Despite all the hype and excitement around the electric vehicle (EV) revolution, there is a plethora of issues yet to be resolved. From primary issues like safety; to other fundamental issues like EV business models and the evolution of the ecosystem: recharging infrastructure, battery swapping, power grid capacities and pricing.

More than a 100,000 units of the Ola electric scooter were pre-booked within 24 hours, when the company announced the launch of their electric scooters on 15th August, 2021. Ola began deliveries in mid-December. Things seemed to be cruising along well and then came this video of the e-scooter self-combusting in Lohegaon, Pune.

With panic spreading, the Government of India’s Ministry of Road Transport and Highways has asked the Centre for Fire, Explosive and Environment Safety to investigate the circumstances that led to the parked vehicle to catch fire. Investigations are also expected to investigate a similar issue with Okinawa Scooters’ Praise Pro electric scooter which also caught fire in a separate incident in Tamil Nadu. So, while the EV market is exploding (pardon the dark pun), safety concerns need to be addressed as the top-most priority.

Another point is that while the safety issue comes to a boil with these incidents, investors need to take a long hard look at the issues confronting this space that is really at the cusp of the automobile revolution. EVs have been introduced as a clean energy initiative as they have zero or very low emissions. While investors are justifiably buoyant—given that the flag bearer of electric mobility, Tesla, is among the world’s most valued companies—they must realise that there’s a lot that’s quite literally up in the air.

India is likely to push EVs aggressively in the automotive and transportation sector to both keep our key global commitments but also under strong citizenry pressure especially in large parts of India that are severely impacted by pollution.

Automakers are creating separate EV business units to be prepared for the EV boom.

However, the surge in EV demand will create a huge need for charging infrastructure and the need to develop safety regulations and standards. Policies and standards around emission regulations, incentives and subsidies for consumers and manufacturers, safety standards, and clear technology roadmaps are steps that need to be taken by the government to ensure the success of EVs in the coming years. Investors will need to understand and study these developments closely instead of just staying focused on soaring valuations and the euphoria of pre-bookings of hastily announced launches.

It is also important to remember that businesses are full of uncertainties and the pandemic has driven this message home to all of us. One moment your business is running smoothly and another minute you might face a sharp crisis. In this age of social media, this can be catastrophic. Business crisis can be unpredictable and may not always be within a brand control. However a properly managed a crisis can be moderated and a brand can come out unscathed.

The key things to keep in mind are, to first, address the issue squarely. Own up that the issue has indeed happened, address customers' concerns by sharing all the information that is publicly available, honestly and transparently. Second, field the company’s CEO—not a spokesperson or a third party. Ola did well on this count with the founder-CEO, Bhavish Aggarwal's tweet emphasising safety as a priority by stating, "We’re investigating this and will fix it." Third, form a credible and independent multi-stakeholder committee to investigate the matter with regular updates to the media. And last, engage with regulators and critical stakeholders and donot adopt a confrontational approach.

Managing a crisis maturely will not only mitigate damage and protect a brand’s reputation from going up in flames, it can help define the course of the brand in a positive way.

The writer is a business strategist, investor and an independent director. Views are personal.