ola electric investments: Ramping up: Ola Electric invests $100 million in battery cell R&D

Ola Electric, the electric vehicle (EV) arm of ride-hailing app Ola, has invested $100 million in the research and development (R&D) of its lithium-ion battery cells, suggest reports from brokerage firms and .

According to the reports, Ola Electric has employed over 200 researchers for the R&D process.

Currently, Ola Electric sources battery cells from South Korea-based LG Chem for its electric scooters. As battery cells are the most expensive component in an EV, manufacturing the cells can bring down the cost for Ola by around 30%.

Ola cofounder Bhavish Aggarwal took to Twitter to reveal the firm’s first indigenously made Li-ion cell.

“The cell is the heart of the EV revolution. We need to make our technology to scale faster and innovate. Much more in the pipeline on our cell technology roadmap!” he tweeted.

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The firm aims to develop the in-house capability of making batteries on its own by 2026 and has developed a sample cell akin to those used in its current escooters. Ola Electric will start with a 20GWh initial cell
manufacturing capacity having 60% localisation to cater to the near-term needs instead of being fully dependent on LG Chem.

Though Ola has grand ambitions, ICICI Securities said it will take time for the company to realise them.

“We believe, with India being at the cusp of gradual electrification across personal mobility segments from internal combustion engine (ICE vehicles), it is too early to envisage capacities of the scale of 10 million and 1 million in two-wheelers and passenger vehicles respectively ,” it said.

Ola Electric was shortlisted for the Center’s Rs 18,000-crore production-linked incentive (PLI) scheme for producing batteries worth 130 GWh. The meeting with the brokerage firms happened at Ola’s 500-acre Futurefactory – the facility which will eventually have an annual manufacturing capacity of 10 million two-wheelers, including scooters and ebikes, 1 million cars, and 100 GWh of battery cells.

ET reported on June 24 that Ola Electric is far from utilizing its capacity and its daily sales had dropped to 130-200 units a day. However, Edelweiss is bullish on Ola Electric’s vertical integration.

“Since 1990, the ICE industry has resorted to outsourcing as the focus was standardisation and cost,” it said in the report. “In the EV world, control over design and patent protection is key to ensure faster scale-up given the disruptive nature of technology. Ola’s strategy is to design and develop in-house. This would help it stay agile and not rely on supplies or vendors. And, insourcing offers control on design, R&D, among others.”

The discussions of plans with the brokerage firms come at a time when Ola Electric has come under scrutiny following an incidents of its scooters catching fire. The company was served a show-cause notice by the Indian government asking why penal action should not be taken against them for delivering faulty electric two-wheelers to the public.

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