Ola Electric in ‘giga’ drive: Rs 3,200 crore to fund its EV business

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Ola Electric announced that it has secured about Rs 3,200 crore in funding as part of its equity and debt round. This funding was obtained from Temasek-led marquee investors and project debt from State Bank of India. The funding round, which includes equity, has raised the Bengaluru-based firm’s valuation to $5.5 billion, up from its previous valuation of $5 billion, according to sources.


The funds raised are expected to create an interim event and pave the way for an initial public offering (IPO), which may be in the range of $800 million to $1 billion.


A person familiar with the company’s strategy said, “Ola is planning to go public in the near future. The public offering is expected to be one of the largest automotive IPOs in India.” Sources indicate that other investors participating in the funding round alongside Temasek include DIG Investment and Tiger Global Management.


The raised funds will be utilised to expand Ola’s electric vehicle (EV) business and establish India’s first lithium-ion (Li-ion) cell manufacturing facility in Krishnagiri (Tamil Nadu).


These funds will also enable Ola Electric to accelerate the growth of its two-wheeler manufacturing capacity and facilitate the launch of electric motorcycles, followed by electric cars, and expedite the construction of the Gigafactory.


Bhavish Aggarwal, founder and chief executive officer of Ola Electric, said, “At Ola, our vision is to end the ICE (internal combustion engine) age in automobiles, and our upcoming Gigafactory will be a big leap in India’s journey towards becoming a global EV hub. We are committed to developing core technologies in EVs and cells and are rapidly scaling up manufacturing to accelerate the transition to sustainable mobility further. Our investors and lenders have shown deep faith in Ola’s vision.”


In January of the previous year, Ola Electric raised over $200 million from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss, and others, valuing the EV manufacturer at $5 billion.


In September 2021, Ola Electric raised $200 million led by Falcon Edge Capital, SoftBank, and others, at a valuation of $3 billion.


The company competes with Ather Energy, Okinawa Autotech, Ampere EV by Greaves, Hero Electric, and TVS Motor Company. It is also planning to produce electric cars, which will put the company in competition with Tata Motors and Mahindra & Mahindra, as well as global giants like Tesla and Hyundai. The company’s substantial investments in research and development and cell manufacturing are expected to underpin the success of its future products.


Ola Electric was selected by the government as the only Indian EV company under its ambitious Production-Linked Incentive (PLI)-Advanced Chemistry Cell (ACC) Scheme, receiving a maximum capacity of 20 gigawatt hour (GWh). The firm stated that the PLI-ACC Scheme will be instrumental in making India self-reliant and localising the most critical aspects of the EV value chain.


Ola is establishing a Li-ion cell manufacturing facility near its Futurefactory in Krishnagiri. This facility is the first of its kind for Li-ion cell manufacturing in India, with an initial capacity of 5 GWh in Phase-I. It will be further scaled up in phases to 100 GWh at full capacity.


Ola has made substantial investments to diversify its portfolio with pioneering innovation in cell technology. The upcoming Gigafactory in Krishnagiri, expected to be operational by early next year, will be equipped to manufacture cells indigenously at scale.


Ola Electric also recently expanded its scooter portfolio to include five products with prices ranging from Rs 89,999 to Rs 1.47 lakh. Unveiled as part of Ola’s annual flagship event last month, the S1 Pro, S1 Air, S1X (3 kilowatt hour, or kWh), S1X (2 kWh), and S1X+ are built on a newer and advanced Gen2 platform, making them some of the best EV options across various price points currently available in the market.


Ola has also introduced its motorcycle lineup, set to be launched by the end of next year. This lineup includes four models: Diamondhead, Adventure, Roadster, and Cruiser, reflecting world-class design standards.


According to an Entrackr report, Ola Electric posted Rs 373 crore in operating revenue during 2021-22 (FY22), compared to Rs 86 lakh in 2020-21. However, it also saw a fourfold rise in losses, reaching Rs 784 crore in FY22.

In August, Ola Electric announced that it continues to dominate the EV two-wheeler segment and has maintained its market leadership for the past year consecutively. With about 19,000 units registered in August (Vahan data), Ola achieved a year-on-year growth of over 400 per cent compared to the corresponding period last year. Ola reported maintaining a market share of about 30 per cent during August.

 

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