Ola Electric has put off its electric car ambitions for “at least two years” to focus more on its two-wheeler business and battery production
The EV major had hired more than 100 employees for the car project, of which around 30% have quit
In 2022, founder and CEO Bhavish Aggarwal had announced plans to launch an electric sports car in two years that could reach 100 km per hour speed within 4 seconds
Ahead of its much-awaited initial public offering (IPO), electric vehicle (EV) major Ola Electric
has reportedly shelved its plans to launch electric cars.
The EV startup has put off its electric car ambitions for “at least two years” to focus more on its two-wheeler business and battery production, Reuters reported citing sources.
Ola Electric’s “focus is all on the two-wheeler market, including bikes, and mass electrification is still some time away – you need to have (charging) infrastructure,” the report quoted one of the sources as saying.
As per the report, the company had hired more than 100 employees and engaged external consultants for its electric car project. However, around 30% of this team has quit now and the remaining have been assigned new roles or projects.
The report added that the IPO-bound EV major had also held initial talks with a few auto component suppliers and even built one prototype of the electric car model. The model is said to have been designed at Ola Electric’s studio in the United Kingdom (UK) and built on the lines of a BMW luxury sedan.
The development comes two years after Ola Electric founder and CEO Bhavish Aggarwal, in 2022, announced plans to launch an electric sports car in two years that could reach 100 km per hour speed within 4 seconds.
At the time, he said that the company would build a new plant for car manufacturing at its existing two-wheeler facility in Tamil Nadu. Aggarwal had then said that the unit would have a capacity to make up to 10 Lakh electric cars a year.
The development comes at a time when Ola Electric is gearing up for its IPO. The company has received the Securities and Exchange Board of India’s (SEBI) approval for a public issue that will comprise a fresh issue of INR 5,500 Cr and an offer for sale (OFS) component of up to 9.51 Cr shares.
As per reports, the EV manufacturer is planning to launch its IPO as early as in the first fortnight of August and is looking to raise around $740 Mn from the public issue. The company is likely to be valued at around $4.5 Bn for its upcoming IPO, a decline of 16-20% from its last funding round.
In preparation for the public listing, the EV major has undertaken a company-wide restructuring exercise to cut costs and streamline operations including mass layoffs.
Ola Electric’s net loss widened 88% year-on-year (YoY) to INR 1,471.6 Cr in the financial year 2022-23 (FY23). Operating revenue surged 605% YoY to INR 2,630.9 Cr during the year.
