Ola Plans To Build World's Largest Electric Vehicle Hub In Tamil Nadu

India's Ola Electric Mobility Pvt. plans to build what it says will be the world's largest electric vehicle hub with an investment of 76.1 billion rupees ($920 million) to localize the supply chain for cleaner transport.

The hub, spanning 2,000 acres (809 hectares) in Tamil Nadu, will be used for manufacturing electric two-wheelers, cars and battery cells, in addition to housing vendor and supplier parks, Ola said in a statement Friday. The Indian startup will begin mass production of cells from the hub later this year, it said. 

While localizing critical elements of the EV supply chain, such as batteries, will make EVs more affordable, India has only a fraction of the raw materials needed to satisfy domestic demand for lithium-ion batteries - forecast by Crisil to grow 100- fold by 2030. Besides Ola, billionaire Mukesh Ambani's Reliance Industries Ltd. and bullion refiner Rajesh Exports Ltd. will receive incentives under a $2.3 billion government program to support advanced battery cell development.

Building a reliable supply chain could help Ola iron out issues in producing electric vehicles. The Bengaluru-based company recalled 1,441 electric scooters after one of the vehicles produced in the batch caught fire. Ola scooter deliveries were initially delayed as India relies heavily on imported parts, the supply of which was disrupted by a global chip shortage.

Ola last year unveiled its first lithium-ion cell developed in its battery innovation center in Bengaluru, which saw an investment of $500 million, the startup said in the statement. Over the next decade, Ola will focus on developing a local supply chain for materials and components such as motors, rare-earth magnets, semiconductors, lithium processing and electrode production from minerals like graphite, nickel, it said.

--With assistance from Saritha Rai.