India-based EV unicorn Ola Electric announced a plan to spend US$100 million to build a Gigafactory, focusing on in-house battery cells, as the company is expanding beyond the EV business into becoming a cell provider.
According to Mint and the Economic Times, Ola Electric, an India-based electric two-wheeler manufacturer poised for its upcoming IPO, announced a US$100 million investment in the initial phase of its Gigafactory to manufacture lithium-ion battery cells. Founder Bhavish Aggarwal highlighted plans for the factory to scale up from 1.5 GWh to 5 GWh capacity in two phases. Furthermore, the company aims to integrate these advanced 4680 form battery cells into its electric two-wheelers by 2025, following recent certification from the Bureau of Indian Standards (BIS).
Aggarwal emphasized the strategic shift towards in-house battery production, which is expected to reduce costs significantly and enhance profitability. Ola Electric plans to supply these cells to other electric vehicle manufacturers and renewable energy firms. The firm is concurrently developing solid-state batteries to further advance its technology portfolio.
With an eye on expanding production capacity from 5 GWh to 6.4 GWh using IPO proceeds, Ola Electric continues to innovate in the EV sector, bolstered by a dominant 40% market share in India's electric two-wheeler market. The company's Futurefactory in Krishnagiri, Tamil Nadu, and its newly established Gigafactory mark significant steps towards localizing battery production, aiming to lessen reliance on imports and reduce production costs.
On June 14, the Securities and Exchange Board of India approved India-based EV startup Ola Electric Mobility for an IPO. The Draft Offer Document was sent on December 26, 2023, and an observation letter was issued on June 10, 2024. In its Draft Red Herring Prospectus, the company plans to launch the Ola Gigafactory in Tamil Nadu, which will focus on battery cell manufacturing.
In addition to the planned Gigafactory, Ola Electric built a Future factory in Tamil Nadu. With an installed capacity of one million units per year, the facility has become the largest integrated electric two-wheeler manufacturing plant in India. In its IPO filing, the company expects the penetration of electric two-wheelers in India to grow from 4.5% in fiscal 2023 (April 2022 to March 2023) to up to 56% by fiscal 2028.
