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“I think early next year you can expect to see our cell in our products,” Agarwal said. “We still have a few months of work ahead of us to complete the production process and bring the product to market, but we are well on our way and in the final stages.”

While the company did not disclose expected cost savings from producing battery cells in-house, these efforts are part of the company’s broader initiative to improve its overall profitability ahead of its IPO, which is expected later this year.

While the manufacturing process of the batteries, which the company calls 4680, has already begun, Agarwal expects them to be integrated into Ola’s electric vehicles by the end of this year.

Also read: Ola Electric receives Sebi approval for market launch ₹IPO over 5,500 crore

The company claims that these cells deliver almost five times more energy than the average battery in the industry and has also received a BIS certification for the same. A certification issued by the Bureau of Industrial Standards assures consumers of quality, reliability and safety.

In it for the long term

The cells manufactured at Ola’s Gigafactory in Krishnagiri, Tamil Nadu, will be used to build vehicles at Ola’s Futurefactory, which is responsible for producing 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 such as battery energy storage systems. The company will also receive subsidies under the government’s production-linked incentives and FAME schemes.

The company has also received approval from the market regulator Sebi to ₹5,500 crore through an IPO, mint Earlier this month, it was reported that the company was aiming for a valuation of around $7 billion.

Ola Electric has crossed the 40% market share mark in electric two-wheeler sales, thanks to significant discounts and a wide range of competitively priced e-scooters across price brackets. In May, Ola was still the dominant player in the Indian electric two-wheeler market by volume.

A long journey lies ahead of us

While the company has maintained its leading position in the country’s electric two-wheeler market, sales in the market itself have been stagnant for the last three months, data shows. Registrations for fast electric two-wheelers fell by 27% in May compared to the high figure recorded a year ago.

Following the government’s decision to significantly reduce FAME II subsidies on electric two-wheelers from June 1, 2023, there has been a surge in pre-purchases in this segment to take advantage of lower prices.

Also read: Ola Electric keeps a battery secret on the way to an IPO

However, since April 2024, the central government has again cut subsidies for e-two-wheelers as part of its transitional policy to bridge the gap between the expiry of FAME II subsidies (on March 31, 2024) and the upcoming implementation of FAME III policy.

Agarwal also acknowledged the shift. “Subsidies have come down in the last two-three years and the government has communicated this very clearly to the industry,” he said. He added, however, that as the EV industry matures, cost structures are trending towards lower price levels below the scale, supported by more domestic production efforts.

Despite all this, Ola Electric held an impressive market share of 48% in May, but electric two-wheelers accounted for only 5% of the country’s total two-wheeler market, similar to last year’s level.