**Uber Halts Discussions to Integrate BluSmart’s Electric Fleet**
Uber has decided to terminate negotiations regarding the integration of approximately 5,000 electric vehicles from BluSmart, a subsidiary of Gensol Engineering Ltd. This decision comes after initial discussions began in March as part of BluSmart’s strategy to revitalize its cab operations, where it was expected to serve as a fleet partner for Uber.
Sources familiar with the situation revealed that the discussions were halted primarily due to concerns over the pricing of the vehicles. Uber’s assessment indicated that the depreciation rates of the electric cars were not adequately reflected in the proposed transition costs. “Uber has now withdrawn its interest,” stated one insider, who requested anonymity. “The main issue was the depreciation of the cars in the BluSmart fleet, and the asking price did not align with Uber’s valuation.”
This marks the second setback for BluSmart, founded by Anmol Jaggi, in recent months. Last month, a significant deal worth ₹315 crore to sell 2,997 vehicles to Chennai’s Refex Group was canceled, with each car valued at ₹10.5 lakh.
An early evaluation of BluSmart’s fleet was conducted by Uber’s team following the initiation of talks. A significant concern raised was the high depreciation associated with electric vehicles, which was not factored into BluSmart’s pricing. Reports from used car marketplaces like Cars24 and Spinny indicate that electric vehicles tend to lose value more rapidly than traditional internal combustion engine (ICE) vehicles. For instance, popular ICE models can retain about 50% of their value within three to five years, while older EV models may experience price discrepancies of up to 6% compared to their ICE counterparts.
Another issue that surfaced during negotiations was the financial encumbrance on a large portion of BluSmart’s fleet, which is currently hypothecated with lenders such as Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (Ireda). Gensol has reportedly secured loans exceeding ₹663 crore to acquire these vehicles, which are leased to BluSmart. Concerns were raised regarding the feasibility of sub-leasing these cars to Uber, leading to advice against proceeding with the deal due to potential regulatory complications.
Queries sent to both Uber and BluSmart for further clarification remained unanswered at the time of publication.
**FAQ**
*What led to Uber’s decision to halt discussions with BluSmart?*
Uber’s decision was primarily influenced by concerns over the depreciation of BluSmart’s electric vehicles and the pricing that did not meet Uber’s valuation standards.
