Ola Cell Technologies Pvt Ltd (OCTPL), a subsidiary of Ola Electric Mobility Ltd, has announced plans to invest ₹2,200 crore in the fiscal year 2025 to expand its lithium-ion cell manufacturing capacity at its Krishnagiri facility in Tamil Nadu. This follows an initial investment of ₹1,200 crore as of September 2024, which established a manufacturing capacity of 1.4 gigawatt-hours (GWh) under the first phase of operations.
The lithium-ion cells produced at the facility have received BIS certification and are undergoing homologation for use in Ola’s electric vehicles. OCTPL intends to begin integrating these cells into its electric two-wheelers by the first quarter of fiscal year 2026, with production volumes expected to increase thereafter.
As part of its Phase 1(b) expansion, OCTPL plans to scale its manufacturing capacity from 1.4 GWh to 5 GWh, with a long-term target of reaching 20 GWh in subsequent phases. The ₹2,200 crore capital expenditure for FY2025 will be financed through a mix of debt and equity, including proceeds from the parent company’s recent IPO, which will also help increase capacity to 6.4 GWh.
Despite intensifying competition and slower-than-expected progress toward profitability, as noted by credit rating agency ICRA, OCTPL’s liquidity remains strong. It is supported by periodic funding from its parent company and access to an undrawn term loan of approximately ₹1,288 crore as of September 2024. The company also held unencumbered cash and liquid investments totaling ₹1,335 crore at the end of September.
OCTPL’s 20 GWh battery unit has been approved under the government’s Advanced Chemistry Cell Production Linked Incentive (ACC-PLI) scheme, making the company eligible for subsidies based on annual value addition over five years starting in FY2025. These subsidies are expected to improve the project’s financial returns in the medium term, contingent on the company achieving production and domestic value addition targets.
India’s electric vehicle market is experiencing significant growth, driven by government initiatives and increased investment in local manufacturing ecosystems. OCTPL, as an early participant in the lithium-ion cell manufacturing sector, is positioned to benefit from the growing demand, particularly as a supplier to the Ola Group.