When Ola Electric started building its Gigafactory in Tamil Nadu, the pitch was straightforward: make battery cells, put them in scooters, sell the scooters. Three years later, on the Q1FY27 earnings call, chairman Bhavish Aggarwal opened with the quarterly numbers, rattled through a volume recovery and a margin hold, and then pivoted to what clearly excited him more.
A 20-GWh energy storage deal, utility-scale battery containers for India's power grid, LFP (Lithium Iron Phosphate) cells heading into defence drones, and MoUs with near-space constellation platforms.
The company signed its first MoU for Mahashakti, a utility-scale energy storage system, covering 20 GWh of deployment by 2032. Aggarwal said India would need at least 400 GWh of storage capacity in the next five to six years and called even that government estimate conservative. A home and commercial storage product called Shakti is getting a cheaper LFP-cell version on August 15.
The Q1FY27 shareholders letter also discloses MoUs across defence and UAV applications, near-space constellation platforms and utility-scale renewable projects. It describes the Axis Energy partnership as one of the largest announced domestic deployments of indigenous battery-storage technology in India.
One Factory, Two Chemistries, Five Markets
The pivot from vehicle maker to energy company rests on a two-chemistry cell strategy. Aggarwal told analysts that 80% of Ola's auto portfolio will shift to LFP cells, which are cheaper and have longer cycle lives. NMC cells (lithium-ion rechargeable battery with a cathode made of nickel, manganese, and cobalt) stay for the top 20% of performance vehicles and niche applications like drones.
All energy storage products will use LFP. Shakti Gen 2, built with LFP, will carry gross margins "even healthier than the auto segment," he said.
The auto business still pays the bills, though. Automotive revenue was Rs 455 crore in Q1, up 72% sequentially. The cell segment generated Rs 5 crore. Service revenue, targeted to grow from roughly Rs 130 crore in FY26 to Rs 400-500 crore by FY28 at approximately 65% gross margins according to the shareholders letter, represents the bridge between the scooter business Ola has and the energy business it wants.
The Math That Needs To Work
Cell yields sit in the "high 70s to 80%" range, Aggarwal disclosed, below the 90% that analysts consider commercially viable. The factory paused production for two months to finish expanding from 2.5 GWh to 6 GWh. Full capacity comes online later this month. The 6-to-20 GWh expansion will require a separate equity raise at the cell entity level, keeping the parent balance sheet insulated.
The consolidated business still burns roughly Rs 195 crore per quarter at the operating level. Aggarwal's bet is that the same Gigafactory can serve scooters, motorcycles, home batteries, grid storage and defence applications simultaneously.
On financials, Ola Electric nearly doubled deliveries in the June quarter, clawed back market share from 5.1% to 8.4%, and held gross margins above 30% despite an 11% spike in commodity costs.
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