Ola Electric eyes stakes in joint ventures to up raw material supplies

Also in talks for tie-ups with firms that provide elements to make batteries

Ola Electric is open to picking up minority stakes in a couple of joint ventures in order to build a robust supply chain of the key raw materials it needs to manufacture advanced cell chemistry batteries.

It is also in talks for partnerships with providers of global anode, cathode and electrolytes which are used to make the batteries in the hope that these providers are keen to open up shop in India and create facilities in the electric vehicle hub which Ola is building. The company has already worked on making its first pre-sample cell in a lab in South Korea and will now test it at its new research and development facility in Bangalore. If all goes according to plan, Ola will be able to produce the first GWH of battery power by the end of 2023.   

Giving a probable timeline for starting commercial production, Ola chief financial officer Arun Kumar G R explained its manufacturing ambitions. “We will now test the cell in our world class lab which has been operational for over 45 days. Once we go to sample A (the various stages of commercializing the cell) and then sample B which would probably be six months apart, sample C is pretty much commercial production so we need to order equipment soon and hope to have our 1GWH by the end of next year,” said Kumar.

Explaining its strategy to ensure key raw materials which have to be sourced from abroad such as lithium, cobalt and nickel, he said the company was ready. “As we speak, we have a mining delegation which has come to visit our plant. On raw materials, we have to dig deep in the supply chain and figure out what contracts at what stage and with whom. We could end up being associated with a few joint ventures in which we are minority partners,” said Kumar. 

The strategy makes sense considering that Chinese companies have control over raw materials globally by virtue of having acquired some companies or taken stakes in them.

For other elements in the making of the battery, Kumar said Ola is venturing into partnership with anode, cathode, and electrolyte providers. 

“They are keen to open shop in India as part of our own EV hub. The government is keen that we build a supply chain in India,” he said.

Ola Electric is one of three players which are eligible for incentives of Rs 18,100 crore under the Production Linked Incentive scheme for setting up advanced chemistry cell battery plants. Ola Electric has committed to set up a plant for batteries of 20 GWH annually.   The company says that, in terms of technology choices for building a lithium ion battery, there are two different chemistries: NMC batteries which use nickel manganese and cobalt oxides or batteries made with lithium iron (ferrous) phosphate or LFP. “While Ola is comfortable developing indigenous technology with NMC, in the next 18-24 months we will also do research on LFP as both are changing fast,” said Kumar.

The plan is to enable both the technologies in its manufacturing plant.   

While LFP technology, as Kumar explains, is used in vehicles where space is not a constraint such as in commercial vehicles, NMC, on the other hand, has high density, enables high performance and is used for two wheelers and four wheelers.  

Ola will not initially make batteries which have 100 per cent of the cells coming from its own plant; it will buy cells from others too. 

“To the extent that we may not have caught up with the volumes we require, we will substitute by buying some cells from global companies as vehicle volumes will also go up. We will have a mix and at some point, we will be completely indigenous. But currently it will give us tremendous bargaining power with other cell players,” said Kumar.

Ola’s R&D centre will also undertake research in other areas such as  sodium ion batteries, the design of a chip for artificial intelligence, and dry coating batteries whose capex is 30 per cent lower than liquid coated batteries.

Kumar said that the journey that Ola has embarked on is essentially an indigenous discovery of technology because the basic technology is already available.

 “The basic chemistry is the same. We can change proportions, in areas where there are Ips, we will find a different process or way to do the same. For instance, we will work on electrolytes which could perhaps make it possible for the charging time to be reduced,” he said.

Ola’s tryst with battery cell tech

• Cell testing has started at its R&D lab and production will begin by next year-end
• Committed to building a plant making batteries of 20 GWH annually under PLI
• Will soon be ordering equipment to manufacture cells and batteries
• Working with global players of cathodes, anodes and electrolytes - seeking partnership with them to set operations in the Ola EV hub
• Working on R&D for two technologies to make lithium ion batteries. Both will be possible at the plant
• In the initial stages, it would mix its own manufactured cells as well as buy from others
• This will improve Ola’s bargaining power with global cell manufacturers