When Ola Electric began developing its Gigafactory in Tamil Nadu, the original plan appeared relatively simple—manufacture battery cells in India and use them to power its growing range of electric scooters.
But the company’s ambitions have expanded significantly.
During the Q1 FY27 earnings call, Ola Electric chairman Bhavish Aggarwal outlined a much broader vision for the Gigafactory. The facility is no longer being positioned only as a battery source for electric vehicles. Ola now wants to use its cell technology across large-scale energy storage, home and commercial batteries, renewable power projects, drones, defence applications and near-space platforms.
The shift could transform the company from an EV-focused manufacturer into a wider battery and energy technology player.
Ola Electric Eyes 20 GWh Energy Storage Opportunity
One of the biggest developments is Ola Electric’s entry into utility-scale energy storage.
The company has signed its first Memorandum of Understanding (MoU) for Mahashakti, its large-scale battery energy storage system. The agreement covers the deployment of 20 GWh of storage capacity by 2032.
Aggarwal believes India’s demand for battery storage could grow rapidly in the coming years. According to him, the country may require at least 400 GWh of energy storage capacity over the next five to six years, although he suggested that even this estimate could be conservative.
Ola is also expanding its presence in smaller energy storage solutions. Its Shakti range for homes and commercial users is set to receive a more affordable version based on LFP battery cells, with the launch scheduled for August 15.
Battery Cells Could Power Drones and Defence Platforms
Ola Electric is also looking beyond the conventional EV market.
The company’s Q1 FY27 shareholder letter highlighted agreements and collaborations related to defence and unmanned aerial vehicle (UAV) applications. Ola has also signed MoUs involving near-space constellation platforms and utility-scale renewable energy projects.
The partnership with Axis Energy is being described as one of the largest announced domestic deployments of indigenous battery storage technology in India.
For Ola, this creates an opportunity to use battery cells developed at its Tamil Nadu facility across multiple industries instead of depending only on electric scooter sales.
One Gigafactory, Two Battery Chemistries and Multiple Markets
At the centre of Ola Electric’s new strategy is a two-chemistry approach.
The company plans to shift around 80% of its automotive portfolio to LFP, or Lithium Iron Phosphate, battery cells. These cells are generally cheaper and offer a longer cycle life, making them suitable for mainstream electric vehicles and energy storage systems.
The remaining 20% of Ola’s vehicle portfolio, particularly higher-performance models, is expected to continue using NMC cells, which use nickel, manganese and cobalt in their cathode chemistry.
Ola also sees NMC technology playing a role in specialised applications, including drones and other use cases that require higher performance.
Meanwhile, all of the company’s energy storage products are expected to use LFP cells.
According to Aggarwal, the upcoming LFP-based Shakti Gen 2 could deliver gross margins that are even stronger than those of Ola’s automotive business.
Electric Scooters Still Drive Ola’s Revenue
Despite the growing focus on batteries and energy storage, Ola Electric’s automotive business remains its primary source of revenue.
The company reported automotive revenue of ₹455 crore in Q1 FY27, marking a 72% sequential increase. In comparison, its cell business generated revenue of around ₹5 crore during the quarter.
Another important part of Ola’s strategy is its service business.
According to the shareholder letter, service revenue is expected to grow from roughly ₹130 crore in FY26 to around ₹400-500 crore by FY28. The company is targeting gross margins of approximately 65% from this segment.
Ola sees this business as an important bridge between its current EV operations and its longer-term expansion into batteries and energy solutions.
The Big Challenge: Improving Battery Cell Production Yields
Ola’s ambitious Gigafactory expansion will depend heavily on whether it can improve manufacturing efficiency.
Aggarwal revealed that battery cell yields are currently in the high-70% to 80% range. This remains below the roughly 90% level that analysts generally view as commercially viable.
The Gigafactory recently paused production for two months as Ola completed an expansion of capacity from 2.5 GWh to 6 GWh. The company expects the full 6 GWh capacity to become operational later this month.
However, scaling the facility further to 20 GWh will require additional funding. Ola plans to raise separate equity at the cell business level for the 6 GWh to 20 GWh expansion, a move intended to limit the impact on the parent company’s balance sheet.
Can One Gigafactory Serve Five Different Markets?
The central idea behind Ola Electric’s strategy is that the same battery manufacturing infrastructure could eventually supply multiple businesses.
The company is betting that its Gigafactory can produce cells for:
- Electric scooters and motorcycles
- Home battery systems
- Commercial energy storage
- Utility-scale power grid projects
- Defence and drone applications
If successful, this would allow Ola to diversify its revenue streams and reduce its dependence on the highly competitive electric two-wheeler market.
However, the financial challenge remains significant.
The consolidated business continues to report operating losses of around ₹195 crore per quarter. Ola’s ability to turn its Gigafactory into a profitable multi-sector battery business will depend on improving production yields, scaling capacity and successfully finding customers outside its own EV ecosystem.
Ola Electric Shows Recovery in Q1 FY27
The company’s core EV business showed signs of improvement during the June quarter.
Ola Electric nearly doubled its vehicle deliveries and increased its market share from 5.1% to 8.4%. It also maintained gross margins above 30%, despite an 11% increase in commodity costs.
The quarterly performance gave Ola some breathing room, but its larger transformation is only beginning.
From an EV Maker to a Battery and Energy Company?
Ola Electric’s latest strategy signals a major shift in how the company sees its future.
What was initially planned as a battery manufacturing facility primarily supporting electric scooters could eventually become a central hub for India’s EV, renewable energy, grid storage and defence technology markets.
The opportunity is enormous, especially as India increases investment in renewable power and seeks to reduce dependence on imported battery technology.
But the strategy also comes with significant execution risks. Ola will need to improve cell manufacturing yields, secure funding for further expansion and prove that its technology can perform across several demanding industries.
For now, the company is making a bold bet: the Gigafactory built to power scooters could one day help power everything from motorcycles and homes to electricity grids, drones and defence platforms.