Ola Electric Mobility, led by Bhavish Aggarwal, is set to integrate lithium iron phosphate (LFP) cells produced by its subsidiary, Ola Cell Technologies, into its electric scooters. This strategic move is expected to take effect by the close of the current financial year, marking a significant step towards localized battery component manufacturing in India.
According to a letter to shareholders, Ola Electric's LFP technology is ready for production ramp-up this quarter. The company projects that LFP production yields will reach approximately 70% by the end of Q4 FY27, at which point its own LFP cells will be incorporated into its vehicles. By Q1 FY28, yields are anticipated to climb to around 90%.
The company claims that achieving a 70% yield makes in-house cell production cost-neutral compared to external procurement. Furthermore, an 85% yield is expected to deliver a 10-15% cost saving over imported cells. This initiative comes as India has seen a substantial increase in battery cell imports, which surged by 103% year-on-year to Rs 28,454 crore between April and August 2026, as per commerce ministry data.
Boosting Domestic EV Manufacturing
Bhavish Aggarwal, founder, chairman, and managing director of Ola Electric, highlighted the company's unique position during a post-earnings analyst call, stating, "We are the only ones who have been able to do it (produce cells) in India." This underscores the pioneering effort in establishing domestic battery cell manufacturing capabilities.
Ola Electric expects its automotive division to consume 2-3 GWh of cell capacity in FY28. The company also has ongoing production of nickel manganese cobalt (NMC) cells, currently achieving yields in the mid-70% range with a roadmap to reach 90%. Integration of NMC cells into vehicles is planned for Q3 FY27. The company's auto business will utilize a mix of approximately 30% NMC cells and 70% LFP cells.
Strategic Shifts and Market Impact
While the focus remains on cell production, Ola Electric has also recently made a significant strategic shift in its distribution model. After years of emulating Tesla's direct-to-consumer (D2C) approach, the company has reversed course, halting order bookings at its D2C stores and planning to shut down all company-owned outlets by December 2026. Instead, it has pivoted to a dealer-based network, which has rapidly expanded to 255 partners and 319 stores as of November 8. The company aims to reach 450 stores by December and 700 by March 2027, noting an improved working capital cycle under the new dealer model.