Ola Electric, India’s leading electric vehicle (EV) manufacturer, has unveiled its plans to invest a significant chunk of its upcoming IPO proceeds in expanding its battery cell production capacity. According to the company’s draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), Rs 1,226.43 crore, roughly 22% of the total Rs 5,500 crore expected from the IPO, will be dedicated to this crucial initiative.

This move underscores Ola Electric’s ambitious vision of securing a self-reliant supply chain for its EV business. Battery cells comprise the heart of electric vehicles, and controlling their production offers several advantages. It can lead to:

• Reduced dependence on foreign suppliers: Currently, India relies heavily on imported battery cells, making EVs susceptible to global price fluctuations and supply chain disruptions. Domestic cell production aims to mitigate this dependence and enhance cost-efficiency.
• Greater control over quality and performance: By manufacturing its own cells, Ola Electric can tailor them to the specific needs of its vehicles, potentially leading to improved performance and range.
• Boosting India’s EV ecosystem: Ola’s cell production expansion can encourage other players in the growing Indian EV market to invest in domestic battery manufacturing, creating a robust ecosystem and fostering technological advancements.

The allocated funds will be used to upgrade the company’s upcoming Ola Gigafactory in Tamil Nadu, expanding its initial cell manufacturing capacity from 5 GWh to 6.4 GWh. This is just the first phase of a larger plan, with a further ramp-up to 20 GWh by the second quarter of 2026 envisioned.

“Developing our in-house cell manufacturing capabilities will give us greater control over the quality, supply, and cost of our batteries,” said Bhavish Aggarwal, Founder and CEO of Ola Electric. This statement reflects the company’s long-term strategy to achieve vertical integration and build a dominant position in the Indian EV market.

The planned IPO deployment also includes Rs 1,600 crore for research and development activities, further emphasizing Ola Electric’s commitment to innovation and developing cutting-edge EV technologies. This investment is crucial for staying ahead of the curve in the rapidly evolving EV space.

Ola Electric’s IPO plans have garnered significant attention, with the potential to be the largest by an Indian EV company. The company’s focus on cell production capacity expansion and R&D showcases its strategic approach to sustainable growth and solidifies its position as a key player in India’s EV revolution.

Key points:

• Ola Electric to invest Rs 1,226 crore of IPO proceeds in cell production capacity expansion.
• Aims to increase capacity from 5 GWh to 6.4 GWh in Phase 1, with further expansion plans.
• Move driven by desire for self-reliance, quality control, and cost-efficiency.
• Rs 1,600 crore also allocated for research and development activities.
• Ola Electric’s IPO plans and focus on cell production mark a significant step in India’s EV journey.

Further inquiries:

• More details on the IPO timeline and valuation are awaited.
• The impact of Ola’s cell production expansion on the Indian EV market remains to be seen.
• Competition from other Indian and international players is a factor to consider.