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 research and development (R&D) of lithium-ion battery cells, according to reports from brokerages ICICI Securities and Edelweiss.

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

Currently, Ola Electric sources battery cells from South Korea-based LG Chem for its electric scooters. Battery cells are the most expensive component in an EV, and manufacturing these can cut costs by around 30%.


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

“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.


Ola Electric aims to develop the in-house capability by 2026. The sample battery cell is akin to those used in its e-scooters now.

The company will start with a 20GWh initial cell manufacturing capacity with 60% localisation to cater to its near-term needs instead of being fully dependent on LG Chem.

Ola Electric was shortlisted for the government’s Rs 18,000-crore production-linked incentive (PLI) scheme for producing 130 GWh worth batteries.

Ola's 500-acre Futurefactory near Krishnagiri in Tamil Nadu will eventually have an annual manufacturing capacity of 10 million two-wheelers, including scooters and e-bikes, one million cars, and 100 GWh of battery cells.

ICICI Securities said the company will take longer to realise some of its goals.

“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,” the broking house said.

ET reported on June 24 that Ola Electric is far from utilising its capacity and that its daily sales had dropped to 130-200 units.

Edelweiss is, however, 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.”

Ola Electric’s discussions of its plans with the brokerage firms come at a time when the company has come under the scanner following incidents of its scooters catching fire.

The government had served a show-cause notice to the company asking why penal action should not be taken against it for delivering faulty electric two-wheelers to the public.