A host of stock brokerages including Emkay Global and Nuvama Institutional Equities attended the analyst meet hosted by electric vehicle startup Ola Electric, which featured interaction with Founder and CMD Bhavish Aggarwal, as well as visits to its facilities in Tamil Nadu and R&D center in Bangalore. The key takeaway from the meet, analysts said, was that the Ola Electric management sees scale and vertical integration as major its competitive advantages. Ola Electric expects a healthy improvement in profitability levels ahead. It said the production cost is climbing down and continued efforts are being made to reduce it further. Besides, Ola Electric expects self-developed battery cells to enter serial production early next year, analysts said.
Ola Electric is India’s e-2W leader with a market share of nearly 50 per cent in the June quarter. It has vehicle assembly capacity of 1 million units, which can be expanded to 10 million units. Ola Electric has vertically integrated capabilities for EV components — motors, cells and electronics.
"The company operates via a direct-to-customer omni-channel distribution network of 900-plus experience centres and 400-plus service centres. The speed at which Ola has set up its manufacturing facility (eight months) is commendable. It has developed new products (since August 2021, launched five products, and unveiled four motorcycle variants). We expect EV penetration to continue and grow from 5 per cent in FY24 to 20 per cent in FY30, implying a 30 per cent CAGR," Nuvama Institutional Equities said
According to management, Ola could be a key beneficiary of this trend despite rising competitive intensity from incumbents. Ola has planned motorcycle launches across Adventure, Diamond Head, Roadster and Cruiser categories FY26 onwards. Nuvama said the generation three platform could be launched next year, which should reduce costs by 15 per cent.
Emkay Global said the Phase 1 of Ola’s Gigafactory has been operational since March 2024, with equipment installed for 1.4GWh lithium cell production annually. The plant features a high degree of automation, and has senior staff from leading global EV organisations like LG Chem, Panasonic, and Tesla.
"Till now, Ola has been importing ‘2170’ cells from Chinese and Korean vendors; now, the company’s in-house developed ‘4680’ cells (5-6 times more energy density vs 2170) are slated for serial production early next year. Ola’s BIC has been working on developing these cells over the last 3 years. The Gigafactory currently produces NMC cells, but is material agnostic and can produce cells for any chemistry, including sodium-ion," Emkay Global said.
Ola Electric has received Sebi's nod for its 7,250 crore IPO. The fresh issue size is seen at Rs 5,500 crore, which would be utilised towards cell manufacturing, debt repayment, R&D spends, organic growth initiatives and general corporate purposes. An offer for sale by the promoter group and various other investors aggregates 9,5 crore shares. The promoter group holding pre-IPO was 45.14 per cent while the direct holding of Bhavish Aggarwal in the company stood at 36.94 per cent.