Ola Electric secures ₹3,200 crores for expansion and lithium-ion cell production
Ola Electric to construct cell manufacturing plant and expand e-scooter operations.
Ola Electric, the electric vehicle arm of Ola, has successfully raised INR 3,200 crores in a recent equity fundraise. This financing round saw participation from its existing investor Temasek, a Singaporean state investor, and also included project debt from the State Bank of India (SBI). The capital infusion is set to propel Ola Electric's ambitious expansion plans, particularly in two key areas.
The substantial funding will be allocated towards the establishment of a state-of-the-art lithium-ion cell manufacturing facility. This facility will play a pivotal role in securing a consistent supply of lithium-ion cells for Ola Electric's electric vehicle production, ensuring self-sufficiency in this critical component.
Additionally, the funds will support the company's endeavor to expand its electric two-wheeler business. Ola Electric has been proactive in introducing a range of eco-friendly transportation solutions, with one of the recent additions being the S1X electric scooter, available at a starting price of INR 89,999 (ex-showroom).
Temasek led the equity fundraise, contributing approximately $90 million to the effort, while additional investments were made by various family offices, cumulatively reaching INR 3,200 crores.
It is noteworthy that this round of funding has valued Ola Electric at $5.4 billion, which is lower than the company's initial target of $7-8 billion. Nevertheless, this financial injection provides Ola Electric with the necessary resources to solidify its position as it gears up for an eagerly anticipated initial public offering (IPO), tentatively scheduled for early 2024.
In alignment with its growth strategy, Ola Electric is actively working on establishing a lithium-ion cell manufacturing facility in India. The initial phase of this facility will boast a capacity of 5 gigawatt-hours (GWh), with plans for significant scaling to reach a full capacity of 100 GWh over time.
Ola Electric has also showcased its commitment to diversifying its electric vehicle portfolio. In August 2022, the company unveiled an electric car with a projected launch in 2024. Additionally, Ola Electric has presented a range of electric motorcycle concepts, including cruiser, naked bike, scrambler, adventure bike, and more.
Bhavish Agarwal, the founder and CEO of Ola Electric, expressed his confidence in the company's growth trajectory. He noted the remarkable success of the recently launched S1 X+ electric scooter, with sales soaring during the festive season. Ola Electric witnessed a scooter being sold every 10 seconds, reflecting nearly 2.5 times the sales volume compared to the previous year, underlining the increasing popularity of its eco-friendly transportation offerings.