Ola Electric ramps up investments to indigenize its battery cells, expand factory capacity to 5 GWh, and broaden its global presence in the electric vehicle sector.
Ola Electric, an electric two-wheeler manufacturer, is set to make a significant impact with its plans to invest $100 million (about ₹834 crore) to build its new Gigafactory for making battery cells. The factory’s first phase will have the capacity to produce 1.5 GWh of battery cells, with plans to expand this to 5 GWh in the second phase. These cells will be manufactured at the new Ola Gigafactory in Krishnagiri, Tamil Nadu, promising a bright future for the company’s growth.
Ola Electric recently received a significant boost with the certification from the Bureau of Indian Standards (BIS) to power its electric vehicles with its lithium-ion battery cells by early next year. This certification not only validates the quality and safety of Ola’s battery cells but also marks a crucial step towards reducing import reliance and lowering electric vehicle production costs. Currently, India’s electric vehicle makers depend on lithium-ion battery cells from countries such as South Korea, China, Japan, and Taiwan.
A gigafactory is a facility where equipment and components related to electrification and decarbonization technologies are manufactured.
The Chairman and Managing Director of Ola Electrics Mr. Bhavish Agarwal highlights that Ola Electrics align with the government’s plan to gradually taper off the FAME subsidies and, in some areas, replace them with production-linked incentive (PLI) schemes.
Additionally, Ola Electric recently achieved a significant milestone with official approval from the Securities and Exchange Board of India (Sebi) for its IPO. This approval paves the way for Ola Electric to raise ₹7,250 crore and target a $6-7 billion valuation. Founder Bhavish Aggarwal plans to sell up to 47.4 million shares, equivalent to a 3.48 per cent stake.
Other selling shareholders include prominent investors such as Indus Trust, Alpine Opportunity Fund, DIG Investment, Internet Fund III (Tiger Global), MacRitchie Investments, Matrix Partners, SoftBank Vision Fund, Alpha Wave Ventures, and Tekne Private Ventures. According to the draft red herring prospectus (DRHP), the proceeds from the fresh issue will be used for capital expenditure (capex), debt repayment, and research and development (R&D). Specifically, the firm plans to allocate ₹1,226 crores to capex, ₹800 crores for debt repayment, ₹1,600 crores for R&D, and ₹350 crores for organic growth initiatives.
In August, Ola Electric raises $240 million from the State Bank of India to support the Gigafactory project. This funding is part of a larger $384 million financing round that includes investment from Singapore’s sovereign fund, Temasek.
