IPO-bound Ola Electric plans to invest $100 million (approximately Rs 834 crore) in the initial phase of constructing its gigafactory for lithium-ion battery cell production as per founder Bhavish Aggarwal.

He mentioned that Ola’s electric scooters will feature these locally-produced battery cells as early as next year.

The investment will be allocated to ‘Phase 1A’ of the Gigafactory, establishing a 1.5 GWh (gigawatt hour) cell manufacturing capacity.

Aggarwal also stated the goal is to increase this capacity to 5 GWh in ‘Phase 1B.’ Ola Electric recently received certification from the Bureau of Indian Standards (BIS) for the battery cells.

“Early next year, you can expect to see our own cells in our products… We still need to finalise the production process and commercialisation, but we are making progress,” he added.

Ola Electric is developing a 4680 form of battery cells, which are more energy-dense and advanced compared to the 2170 form currently used in its electric scooters, Aggarwal explained.

The company also plans to supply these cells to third-party firms, including other electric two-wheeler manufacturers and renewable energy companies. Additionally, the firm is working on solid-state batteries.

“Approximately 35-40 per cent of the cost of two-wheeler EVs is attributed to the battery… We expect significant margin benefits as we start using our own cells,” Aggarwal said.

Last August, Ola Electric raised $240 million from the State Bank of India to fund the Gigafactory, part of a $384 million financing round that included participation from Singapore’s sovereign fund Temasek.

In its draft prospectus with the Securities and Exchange Board of India (SEBI), Ola has indicated plans to use Rs 1,226 crore ($147 million) from its initial public offering to expand the gigafactory’s capacity from 5 GWh to 6.4 GWh by FY25 and FY26.

The company will also maintain its policy of employing only female workers on the manufacturing floor at its new battery cell factory, replicating the approach at its scooter assembly plant, the Future Factory.