Ola Electric to produce domestic lithium-ion cells by 2023, targets initial plant capacity of 5GW

Ola Electric, India’s largest electric vehicles company, showcased its popular S1 scooters at EICMA 2022. The company announced its plan to enter the key European markets in Q1 2023, as a part of the International expansion strategy. With this announcement, Ola Electric has taken the first step towards leading Europe’s journey to become the first automotive emission-free continent by 2050, said the company in a press release. (Source: Ola Electric)

Ola Electric, an electric vehicle (EV) manufacturing firm, plans to launch its own lithium-ion cell by the end of 2023, an important component in making batteries for EVs.

Presently, India's EV manufacturers rely on lithium-ion battery cells from China, Taiwan, Japan, and Korea. Ola currently sources its cells from LG Chem, South Korea.

"We will be India's first and largest lithium cell manufacturers. We had been building the technology for the last two years... we have already built our own tech without any dependence on other countries or players," Bhavish Aggarwal, founder and CEO of Ola Electric, stated in a press conference on Thursday.

The initial capacity of the plant will be around 5 gigawatts (GW), Aggarwal said.

This is the most important component of an electric vehicle battery, and experts believe that if produced in India, the cost of the battery pack itself will be reduced by 40-50%. Ola recently announced a $500 million investment in battery innovation and indigenous research and development (R&D).

Aggarwal stated that a giga factory dedicated to lithium battery cells is being built within the same manufacturing facility in Krishnagiri, Tamil Nadu.

"We are putting up a large Gigafactory in Krishnagiri for the lithium-ion cell...we will first utilise it to our bikes and think of monetising the same and make it available for the market, " he added.

Aggarwal said that Ola Electric will become cash positive in 2023 and that Ola Cabs, the ride-sharing division of ANI Technologies, will go public in the second half of 2023.

"Our EV two-wheeler business will turn cash positive and Ebitda positive by 2023, and we will invest this money into rolling out new products," he said.

The initial plan, according to Aggarwal, was to launch an IPO in 2022, but the plans were delayed due to the macroeconomic situation.

Ola is on track to bring electric cars to market by 2024, according to Aggarwal, who also stated that the company is interested in rolling out subscription models for electric two-wheelers, in which a buyer can rent the vehicle rather than purchasing it.

"We are not just a manufacturing firm, we are also a consumer internet firm and we see many of our users and stakeholders have shown interest in a subscription-based model and we will introduce the same," he said without giving a timeline.

Aggarwal stated that Ola Electric has expanded to Nepal and Italy and plans to expand to other countries next year.

The company also launched the Move OS3 software update, which includes features such as improved hill hold, proximity unlock, party mode, Hypercharging, vacation mode, regen mode, display mode, and more.

The company plans to set up camps across India on Saturday this week to assist EV owners in updating their software from OS2 to OS3. The company had rolled out the Beta version of the update to more than 10,000 users.

While speaking to the media, Aggarwal also stated that the main focus for Ola Electric in 2023 will be making motorbikes, rolling out lithium-ion cells, and entering the commercial vehicle space.

"Our investment focus for 2023 will be getting into small and light-weight commercial vehicles, motorbikes and launch other products as well along with lithium-ion cells, " he said.

Ola Electric announced in July that it had surpassed Rs 500 crore in revenue in the first two months of FY22-23, but did not disclose the total number of vehicles sold during the two months.

Ola Electric reported in November that it had sold approximately 20,000 units of its electric scooters and had a strong performance during the festive season.

On average, Ola Electric produces 1,000 units per day. Ola has seen over 60% monthly growth, while the overall two-wheeler EV industry has grown by nearly 30%, according to a November statement from the company.