IPO-Bound Ola Electric To Become ‘Atmanirbhar’ On Cells From 2025

Soon after its IPO, Ola Electric Mobility Pvt. is set to become self-reliant—as far as battery needs are concerned.

India's largest electric scooter maker will begin using cells manufactured at its gigafactory in Krishnagiri, Tamil Nadu, from early next year, founder Bhavish Aggarwal told NDTV Profit over the weekend. That would be a first for India's nascent electric vehicle industry, which meets its battery needs through imports largely from China.

“The trial production (of the cells) commenced a few weeks ago. We're going through a series of checks over the next 6–9 months to get ready for commercial production,” said Aggarwal. “So, early next year…is when our own cells will come into our own vehicles.”

In fact, just days ago, the ‘4680' cell being developed at the Ola Battery Innovation Centre received certification from the Bureau of Indian Standards—an important milestone before commercial production starts at the Ola Gigafactory.

The development is significant. India does not make any EV battery cells at present. They're imported largely from China and South Korea. Consequently, they make up roughly a third of the cost of an electric vehicle in India.

Yes, there is a production-linked incentive scheme for manufacturing advanced chemistry cells in India, but only Ola Electric—a beneficiary of 20 GWh—has made some headway towards commercial production. The EV startup will invest $100 million in the first phase to build a 5 GWh production capacity—enough to power 1.2 million Ola electric scooters.

For Ola Electric, localised battery manufacturing will bring with it cost as well as competitive advantage, Aggarwal said.

“The biggest, costliest component in EVs is the battery, and that's where we started focusing on building our own cell four years ago,” he said.

In the ICE (internal combustion engine) world, the biggest competitive advantage was the engine technology—the companies that built their own engines always had the best products and the lowest prices. The cell in EVs, in many ways, is analogous to that.

“So, over the past four years, we built a lab to prove our technology. The next step was the gigafactory, where trial production started a few weeks ago. That will eventually become a 20 GWh facility,” Aggarwal said.

“When we complete Phase 1, through all of next year, we will have enough capacity to serve ourselves by that time, as well as potentially sell to other automakers.”

The IPO Valuation

But before Ola Electric becomes "self-reliant,"  there's its initial public offering. In December 2023, the company filed with India's market regulator draft papers to raise Rs 5,500 crore by offering fresh stock and about Rs 1,750 crore via a so-called offer-for-sale by founder Aggarwal and a clutch of investors.

But the Bengaluru-based EV startup is facing investor pushback on its targeted valuation, Bloomberg reported, citing people aware of the matter. Aggarwal has been pushing for a potential valuation of $7 billion. That would compare with a valuation of about $5 billion, based on initial feedback from investors. At $5 billion, Ola Electric's current investors may opt not to sell existing shares in the company, Bloomberg reported.

Aggarwal chose to ignore the valuation question.

“We don't have any valuation targets; the valuation pricing is always set by the market,” he told NDTV Profit. “The price band will be published in due course as we go through the steps. We'll definitely do that in consultation with all our bankers, etc.”

“But our focus, as you've seen (in the monthly numbers), is in growing the industry and in growing our business—not valuations.”

Ola Electric accounts for more than a third of India's nascent electric two-wheeler industry. According to the latest VAHAN data, the company recorded 36,716 registrations, or 46% overall. In the first quarter of FY25, Ola Electric has grown by more than 50% year-on-year to 1.08 million units.

“India needs to become a global leader in EVs, and more companies need to put their weight behind this movement,” Aggarwal said when asked about learnings from the IPO process.

“We have done our bit, and we will continue to do our bit. But I really wish our competitors the best. I wish that they continue to build products that excite the customer and the whole industry.”

Watch the full video here: