Bengaluru: Bhavish Agarwal-led Ola Electric expects to use its in-house battery cells for its electric vehicles from early next year, the company’s managing director said in a press conference on Saturday.
“I think early next year is when you can expect to see our cell in our products,” Agarwal said. “We still have a few months more of work to do to finalize the production process and commercialize this, but we are well on our way and are in (the) final stages.”
While the company did not disclose the expected cost savings from its in-house manufacturing of battery cells, these efforts are a part of the company’s broader push to improve the overall profitability of the company in the run up to a public listing that is expected to roll out later this year.
While the process to manufacture the batteries, which the company calls 4680, has already begun, Agarwal expects them to become integrated with Ola Electric vehicles by the end of this year.
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The company claims that these cells deliver nearly five times more energy than the average batteries produced by the industry, and it has also received a BIS certification for the same. A certification issued by the bureau of industry standards assures consumers on quality, reliability, and safety.
In for the long haul
The cells, manufactured in Ola’s Krishnagiri, Tamil Nadu-based Gigafactory, will be used to make vehicles in Ola’s Futurefactory, which is responsible for the production of electric two wheelers and other core components such as battery packs, motors and vehicle frames.
Ola’s Gigafactory will produce cells for existing product lines, future products, and energy products like battery-energy storage systems. The company also receives subsidies under the government’s production linked incentives and FAME schemes.
The company has also received a nod from markets regulator Sebi to raise upto ₹5,500 crores through an initial public offering, Mint reported earlier this month. The company is seeking a valuation of about $7 billion.
Ola Electric has surged past the 40% market share milestone in electric two-wheeler sales, fuelled by substantial discounts and a broad selection of competitively priced e-scooters across price ranges. As of May, Ola remained the dominant player in India’s e-two-wheeler market by volume.
A long ride ahead
While the company has held on to the pole position in the country’s e-two-wheeler market, the market itself has witnessed flat volumes over the past three months, data shows. Registrations for high-speed electric two-wheelers declined by 27% in May compared to the previous year’s high base.
Following the government’s decision to significantly reduce FAME-II subsidies on electric two-wheelers starting 1 June, 2023, the segment had witnessed a surge in pre-purchases to avail the benefit of lower prices.
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However, since April 2024, the central government has again reduced the subsidies for e-two-wheelers as a part of its transition policy to bridge the gap between the expiration of FAME-II (on March 31, 2024) subsidies and the forthcoming FAME-III policy implementation.
Agarwal also acknowledged the shift. “The subsidy has been tapering off over the last two to three years and the government has been very clear in its communication to the industry,” he said. However, he added that as the EV industry matures, cost structures are coming to a lower price point below scale, aided by more in-house manufacturing efforts.
Despite all that, Ola Electric held an impressive 48% market share in May, but electric two-wheelers comprised only 5% of the overall two-wheeler market in the country, similar to the levels seen last year.