Ola Electric expects homegrown LFP cells to match import costs by FY27-end

Bhavish Aggarwal-led Ola Electric Mobility plans to integrate lithium iron phosphate (LFP) cells manufactured by its cell subsidiary, Ola Cell Technologies, into its electric scooters by the end of the current financial year.

“Our LFP technology is ready, and we are starting to ramp up LFP production this quarter. We expect LFP yields to reach around 70% by the end of next quarter (Q4 FY27), when we will integrate our own LFP cells into our vehicles, and around 90% in Q1 FY28,” the pure-play EV maker said in its shareholders’ letter.

At a yield of about 70%, using in-house cells becomes cost-neutral compared with procuring them from external suppliers, the company claimed. “At 85% yield, we save about 10–15% over buying from outside,” the letter said.

The move by an electric vehicle maker to use domestically manufactured cells comes at a time when India’s battery cell imports have more than doubled. Cell imports surged 103% year-on-year to Rs 28,454 crore during April-August 2026, according to data from the commerce ministry.

“We are the only ones who have been able to do it (produce cells) in India,” Aggarwal, founder, chairman and managing director of Ola Electric, said during the company’s post-earnings analyst call.

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Ola Electric expects its automotive business to consume 2–3 GWh of cell capacity in FY28.

“Capacity utilisation will ramp up as we integrate cells into our products: the auto business and the Shakti (BESS) portfolio,” Aggarwal said.

The company is currently achieving yields in the mid-70% range in NMC cell production and has a roadmap to increase them to 90%.

Ola Electric plans to begin integrating NMC cells into its vehicles in Q3 FY27, followed by a ramp-up in LFP cell production towards the end of Q4 FY27.

“Roughly 30% of our auto business will use NMC cells and 70% will use LFP cells,” Aggarwal said.

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U-turn on D2C model

While Aggarwal has succeeded in commissioning India’s first battery cell manufacturing facility, the decision to shut down all company-owned stores established under the direct-to-consumer (D2C) model highlights a significant strategic reversal in his approach.

After emulating Elon Musk-led Tesla’s D2C model for several years to get rid of the middlemen, Aggarwal has finally given up on directly selling products to the consumer.

“People were saying things wouldn’t happen without dealerships. My model has proven D2C is better. The cost of distribution is much lower in D2C. Feedback comes directly, I engage with the customers directly. My cost is lower,” Aggarwal had told BT in 2023.

Fast forward to 2026, Ola Electric has made a sharp U-turn, halting order bookings at its D2C stores from November 1 and planning to shut down all company-owned outlets by December 2026.

The company’s first dealer stores opened on September 4. In the two months since, the network has scaled to 255 partners and 319 stores as of November 8. “We plan to reach about 450 stores by December, and 700 by March 2027,” the company’s shareholders’ letter stated.

The EV maker said its working capital cycle has improved under the dealer model, as dealers pay for vehicles when they order and hold stock in their own stores.