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Ola Electric, the ride-hailing firm’s electric vehicle arm, is investing about $500 million for setting up its battery innovation centre (BIC) in Bengaluru. Bhavish Aggarwal-led Ola said that BIC will be one of the world’s largest and most advanced cell research and development (R&D) facilities with more than 165 ‘unique and cutting-edge’ laboratory equipment to cover all aspects of cell-related R&D. The company didn’t reveal the time period for the investment. But, according to sources, it is three to five years.
In India, SoftBank-backed Ola is now in direct competition with electric two-wheeler makers like Ather Energy, Hero Electric, Bajaj, TVS Motor Company, Bounce, and Boom Motors. The firm also has plans to launch electric cars, motorcycles, sport utility vehicles, and robotaxis.
“Electric mobility is a high-growth sector — one which is R&D intensive,” said Aggarwal, founder and chief executive officer (CEO), Ola Electric, adding, “Ola’s BIC will be the cornerstone of core cell technology (tech) development and battery innovation out of India for the world.”
ALSO READ: Ola CEO Bhavish Aggarwal dwells on plans to build electric sports car
Earlier this year, Ola Electric raised over $200 million from Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss and others. The round valued the company at $5 billion — an increase from its previous valuation of $3 billion.
The company has experienced one fire incident to date, according to the Kotak Institutional Equities (KIE) report. It said the initial findings of the government suggested issues with battery and battery management systems.
Ola said BIC will have the wherewithal to develop complete packages of battery pack design, fabrication, and testing under one roof.
It will also be equipped with an integrated facility for hand-in-hand nanoscale analysis, molecular dynamics simulation, and an in-house crystal structure analysis to develop new battery material.
Ola’s BIC will recruit top global talent, including 500 engineers who will be supported by an additional 1,000 researchers in India and multiple global centres. The firm will also be working with various Indian Institutes of Technology in the country.
Ola said BIC will have high-tech research equipment, including X-ray photoelectron spectroscopy machines and Gen 3 CT scan equipment for non-destructive testing for cell and pack imaging.
Ola recently unveiled its first Li-ion cell, nickel-manganese-cobalt 2170.
Built in-house, Ola will begin mass production of its cell from its upcoming Gigafactory by 2023. It expects the current cell cost of $150/ kilowatt-hour (kWh) to reduce to $100/kWh as it moves this in-house from its current vendor — LG Chem. The company expects this move to lead to a 10-20 per cent reduction in the total cost and an 8.5 per cent improvement at the earnings before interest, tax, depreciation, and amortisation level, according to the KIE report.
In order to achieve these objectives, the company has managed to obtain the incentives under the advanced chemistry cell production-linked incentive to set up 20 gigawatt-hour of annual capacity. This is expected to enable the company to control its costs further.
This year, Ola Electric invested in an Israeli battery tech company StoreDot — a pioneer in batteries with extreme fast-charging (XFC) tech. The investment in StoreDot is the first of several global strategic investments planned by Ola Electric.
The firm will have access to the company’s XFC battery tech, which charges a battery from zero to 100 per cent in five minutes. The company also inducted Prabhakar Patil, former CEO of LG Chem Power, to its board.
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