Ola Electric Ambitious Expansion in Battery Cell Production
IPO-bound Ola Electric has announced a $100 million investment in the first phase of constructing its gigafactory, aimed at producing lithium-ion battery cells. Founder Bhavish Aggarwal revealed that this significant investment will facilitate the initial setup of 1.5 GWh (gigawatt hour) of cell manufacturing capacity, with plans to scale up to 5 GWh in ‘phase 1B’. The locally-produced battery cells will be integrated into Ola’s electric scooters by early next year, marking a substantial advancement in their manufacturing process.
Innovative Battery Cell Development
Ola Electric is developing a new 4680 form of battery cells, which promises greater energy density and technological advancement compared to the 2170 form currently used. This new development is poised to enhance the performance and efficiency of Ola’s electric scooters. Additionally, Ola Electric is working on solid-state batteries and plans to supply battery cells to third-party firms, including other electric two-wheeler manufacturers and renewable energy companies.
Strategic Financial Moves and Workforce Policies
Last August, Ola Electric secured $240 million from the State Bank of India as part of a $384 million financing round, which included investment from Singapore’s sovereign fund, Temasek. According to their draft prospectus with the Securities and Exchange Board of India (Sebi), Ola aims to allocate Rs 1,226 crore ($147 million) from its IPO proceeds to further expand the Gigafactory’s capacity from 5 GWh to 6.4 GWh by FY25 and FY26. The company will maintain its policy of employing only female workers on the manufacturing floor, a practice successfully implemented at its Future Factory.
Market Position and Future Prospects
Ola Electric is poised to list this year, having recently received Sebi approval for its IPO, targeting to raise up to Rs 5,500 crore through a fresh issue and an offer-for-sale of 95.2 million shares. Responding to the opening of a new factory by rival Ather Energy in Maharashtra, Aggarwal emphasized Karnataka’s robust supply chain capabilities and justified the initial decision to set up in Tamil Nadu based on favorable terms received at the time. As Ola Electric continues to innovate and expand, it positions itself as a formidable player in the electric vehicle market.
