Ola Electric Eyes B2B Battery Supply Amid India's EV Localization Push

Ola Electric is shifting its battery division focus from supplying only its own electric scooters to becoming a key provider for India's electric vehicle and energy storage sectors. The company plans to supply external automakers, leveraging its integrated manufacturing and proprietary 4680 Bharat Cell technology. This move targets India's critical need for local battery supply chains, as the country currently relies heavily on imports.

Gigafactory Capacity and B2B Sales Targets

Ola Electric is engaging with global and domestic automakers to supply lithium-ion cells and battery packs from its Krishnagiri gigafactory. The factory is India's only operational gigafactory with 6 GWh capacity, with plans to expand to 12 GWh by July 2027 and 20 GWh by the end of fiscal year 2028. Around 6.5 GWh of this future capacity is set aside for third-party sales. The company has invested approximately Rs 5,300 crore in manufacturing, battery technology, and R&D, with most of its investment cycle now complete. Ola Electric has previously stated its battery business could generate ₹15,000 crore to ₹20,000 crore in revenue in the coming years.

India's Battery Landscape and Competition

Despite considerable efforts to localize battery production, significant challenges remain in India. The country depends almost entirely on imported battery cells. The government's Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells has seen slow progress, with only 1.4 GWh commissioned as of October 2025, all from Ola Electric.

Other companies are also advancing. Reliance Industries is pivoting towards assembling Battery Energy Storage Systems (BESS) after facing setbacks in securing Chinese cell manufacturing technology, though it maintains long-term battery manufacturing goals. Tata Group, through Agratas Energy Storage Solutions, is investing Rs 13,000 crore to build a 20 GWh lithium-ion cell plant in Gujarat. Players like Amara Raja Batteries and Exide Industries are also expanding their lithium-ion cell and battery pack manufacturing capabilities, indicating a dynamic but fragmented market.

Ola's Sales Performance and Financials

Ola Electric has achieved rapid scaling, reaching 1 million cumulative retail sales by March 2026, the first Indian EV manufacturer to do so. However, its market share in the electric two-wheeler segment has dropped from its peak. In April 2026, its share stood at around 8.2%, down from 30-40% during its growth phase, facing increased competition and a preference for established service networks.

Financially, the company reported consolidated revenue of INR 470 crore for Q3 FY26 with a net loss of INR 487 crore. Its gross margin was 34.3% in the same quarter. Earlier funding rounds placed its valuation around $5-5.5 billion in late 2023, with total funding exceeding $1 billion.

Challenges and Market Headwinds

Ola Electric faces considerable challenges. Its sales volume and market share have notably declined from their peak. April 2026 sales fell 38.60% year-on-year, with market share at 8.18%, showing intense competition from established players like TVS Motor, Bajaj Auto, and Ather Energy.

The company's ambitious capacity expansion targets could be affected by slower-than-anticipated growth in the broader Indian EV market, which previously led Ola to delay plans for capacity beyond 5 GWh until FY29. The proprietary 4680 Bharat Cell technology needs successful scaling for cost efficiency, a difficult task in battery manufacturing. The Indian EV sector is also vulnerable to global supply chain disruptions, especially China's dominance in critical minerals. The company consistently reports substantial net losses, highlighting the persistent challenge of achieving profitability despite operational improvements.

Outlook for Battery Business and Energy Storage

Ola Electric's focus on third-party battery sales aims to diversify revenue and capitalize on India's demand for local EV components. Management expects gross margins to stabilize between 35%-40% through FY 2027 and forecasts INR 15,000-20,000 crore in revenue potential from its cell business. The company's own Ola Shakti energy storage system is also a potential demand driver, projected to scale to 5 GWh within a few years. Success in these B2B partnerships will be key to Ola's position as a foundational part of India's clean energy transition, if it can manage competitive pressures and scale up manufacturing effectively.