Expanding Beyond Scooter Manufacturing

Ola Electric is significantly expanding its cell manufacturing operations, marking a major shift in strategy. The company plans to dedicate a large part of its future capacity to third-party sales, aiming to become a key player in India's overall electric vehicle and energy storage market, extending its role beyond just manufacturing its own electric scooters.

Battery Supply Partnerships Underway

Ola Electric is in advanced talks with global and domestic automakers to supply lithium-ion cells and battery packs from its Krishnagiri gigafactory. This is a major shift from its previous focus on supplying only its own electric scooters. Ola operates India's only functioning gigafactory, with an installed capacity of 6 GWh. Its subsidiary, Ola Cell Technologies, has successfully commercialized its 4680-format Bharat Cell, a technology also used by Tesla. The company plans to increase its installed capacity to 12 GWh by July 2027 and 20 GWh by the end of fiscal year 2028. Around 6.5 GWh of this capacity is earmarked for third-party sales to other car manufacturers.

India's Import Reliance and Slow Incentive Progress

This move is particularly important because India relies heavily on imported battery cells, with imports accounting for nearly 100% of its needs. The government's Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme aims to boost domestic manufacturing to 50 GWh, but progress has been slow. As of October 2025, only 1.4 GWh, or 2.8% of the target, has been commissioned, entirely by Ola Electric. No incentives have been paid out under the scheme yet, indicating significant implementation challenges. This slow pace in domestic production contrasts sharply with India's surging EV battery demand, which is projected to grow tenfold by 2032 to around 200 GWh.

Competitive Landscape and Capacity Plans

Ola Electric's Krishnagiri plant aims to scale its capacity from the current 6 GWh towards a future target of 100 GWh, with a near-term focus on reaching 20 GWh by FY28. This domestic capacity target contrasts with the total announced capacity in India, which is around 178 GWh but with much lower operational readiness. Competitors like Exide Industries, Amara Raja Batteries, and Reliance New Energy are also investing in domestic manufacturing. Reliance, for instance, is building a 10 GWh plant in Jamnagar. Globally, China dominates battery cell manufacturing with over 3 TWh of capacity, showing the vast scale of the international market.

Financial Challenges and Market Concerns

However, Ola Electric faces financial challenges. As a private company, it has raised about $1 billion, most recently through a $12 million venture debt in June 2024. Its financial performance has been difficult, reporting a net loss of ₹22.8 billion for FY2025, a 44% increase year-on-year. Analyst sentiment is cautious, with ratings generally leaning towards 'Sell' for Ola Electric Mobility, due to potential downsides and lower revenue growth forecasts. Reliance on external funding and significant operational losses raise questions about the long-term viability of its expansion plans. The wider industry also faces risks, including reliance on imported components, global battery oversupply, and difficulties with government incentive schemes like PLI, which have so far produced little capacity beyond Ola's early efforts. Ola's battery subsidiary is also reportedly looking to sell stakes, suggesting a need for more capital.

Market Potential and Self-Reliance Goals

By entering the B2B battery supply market, Ola Electric is poised to capture a significant share of India's fast-growing EV battery sector. With demand projected to reach 54 GWh by FY27 and over 127 GWh by FY30, supplying external automakers could generate substantial revenue streams, estimated between ₹15,000 crore and ₹20,000 crore in the coming years. This strategy could significantly reduce India's battery import costs and support the nation's goal of greater self-sufficiency in essential EV components.