Ola’s mega Rs 6000 crore IPO will hit the street on Friday. Speaking to media at the IPO launch, the founder and CEO Bhavish Aggarwal highlighted the first mover’s advantage that Ola has in the electric two-wheeler space and added that the indigenously developed 4680 lithium cell will give the electric start-up a price advantage. Referring to many legacy players who forayed into the electric two-wheeler space rather recently, he said “der aaye durust aaye” or better late than never. He reiterated that Ola is a “mission-driven company” and ‘electric vehicles are the biggest transformation in Auto industry” in recent times.
Ola increasing market share
Ola currently commands a market share of nearly 40% in the electric two-wheelers market. According to the CEO, that has put them in a commanding position in the market and growing competition will help develop the overall EV ecosystem in the country.
According to its Red Herring Prospectus, the electric two-wheeler maker has clocked strong growth over past two fiscals. Its FY24 revenue is over Rs 5000 crore from Rs 373 crore in FY22, up a little over 13 times. The uptick in revenue is primarily driven by two-wheeler sales. This has helped in limiting its losses. The company will use proceeds from the IPO to pare off Rs 800 crore debt from the books.
Ola’s 4680 cell 5x more powerful
That apart the company will also use the funds for its electric cell project. According to the Red Herring Prospectus, Ola Electric will be using Rs 1,600 crore from the IPO proceeds for research and development and Rs 1,200 crore plus will be used for the expansion and this includes its manufacturing facility as well as the Gigafactory in Tamil Nadu.
Ola Electric showcased the 4680 cell at the media conference. According to Aggarwal it offers “5x more energy based on its density and is chemistry agnostic.” The management however refrained from giving any target in terms of the range or the kind of cost savings it could bring about. It is likely to be used in Ola’s electric motorcycle.
The Ola Gigafactory for cell manufacturing is part of the company’s plan to bring about backward integration of the cell supply. According to Aggarwal, the initial aim is to achieve self sufficiency in terms of its in-house manufacturing. However, the EV maker is “not ruling out selling to other customers,” once the in-house manufacturing and requirement achieves a certain scale. He added that the “Budget proposals, with respect to duty exemptions on 25 critical minerals, is a positive for the sector.” Ola Electric, at the moment, uses Lithium-ion batteries imported from China, Korea and Japan.
