About Ola Electric Mobilty Limited

Ola Electric Mobility is a pure EV player in India and are building vertically integrated technology and manufacturing capabilities for EVs and EV components, including cells. They manufacture EVs and certain core EV components like battery packs, motors and vehicle frames at the Ola Future factory. Their business focuses on capturing the opportunity arising out of electrification of mobility in India and they also seek opportunities to export their EVs in select international markets in the future. They have delivered seven products and additionally announced four new products since their first product announcement in August 2021. They commenced delivery of their first EV model, the Ola S1 Pro, in December 2021. This was followed by the delivery of the Ola S1 in September 2022, the Ola S1 Air in August 2023, the Ola S1 X+ in December 2023 and the Ola S1 X (2 kWh), the Ola S1 X (3 kWh) and the Ola S1 X (4 kWh) in May 2024. On August 15, 2023, they also announced a line-up of motorcycles comprising four models, Diamondhead, Adventure, Roadster and Cruiser. They plan to commence delivery of the motorcycles in the first half of Fiscal 2026. Within nine months of delivering their first EV scooter in December 2021, they became the best-selling E2W brand in India in terms of monthly E2W registrations on the VAHAN Portal of Ministry of Road Transport and Highways (“VAHAN”).

Research and development (“R&D”) and technology is at the core of their business model with a focus on in-house product innovation. They undertake R&D activities in India, the United Kingdom (“UK”) and the United States (“US”) focused on designing and developing new EV products and core EV components, such as battery packs, motors and vehicle frames. They are in the process of building our EV hub in Krishnagiri and Dharmapuri districts in Tamil Nadu, India, which includes their Ola Future factory, their upcoming Ola Gigafactory and co-located suppliers in Krishnagiri district. At their Ola Futurefactory, they manufacture their EV scooters using certain EV components manufactured in-house and other components procured from third parties, such as cells. The Ola Futurefactory is the largest integrated and automated E2W manufacturing plant in India (in terms of production capacity) by an E2W-only OEM, as at March 31, 2024. In addition, they operate a BIC in Bengaluru, India that is focused on developing cell and battery technology and manufacturing processes for their forthcoming cell manufacturing at the Ola Gigafactory.

They operate their own direct-to-customer (“D2C”) omnichannel distribution network across India, comprising 870 experience centres and 431 service centres (of which 429 service centres are located within experience centres) as at March 31, 2024 in addition to their Ola Electric website. Their network of experience centres was India’s largest company-owned network of experience centres as at March 31, 2024.

India automotive market consists of ~28Mn vehicles and is central to the economy.
India has a large automotive market, comprising annual production of ~28Mn vehicles as of FY 2024 (excluding electric rickshaws - Source: Society of Indian Automobile Manufacturers (SIAM)). It is central to India’s manufacturing sector and the overall economy, contributing ~35% to the manufacturing GDP and ~7% to the overall GDP in FY 2023. Further, the Indian government envisions improving contribution of the automotive industry to reach ~40% of the manufacturing GDP by FY 2026 (Source: Automotive Mission Plan 2016-26). 

While India’s (and global) vehicle production experienced a short-term decline in the FY 2020 – FY 2022 period, (due to the global shortage of semiconductors, pandemic-induced lockdowns, increase in fuel prices and volatile geo-politics driven by the Russia-Ukraine conflict), it has recovered well to ~92% of FY 2019 levels (as of FY 2024). Despite having large two-wheeler (2W) and four-wheeler passenger-vehicles (4W-Passenger Vehicle) markets, India sees limited penetration, indicating a solid backdrop for medium to long-term volume growth.

Electrification of India’s Automotive Market
2Ws are at the forefront of automotive electrification in India as Indian consumer is sensitive to initial vehicle price. E2W adoption has grown to constitute ~5.4% of 2W registrations in FY 2024, primarily led by scooters. Moreover, EVs are likely to account for almost half of the domestic 2W sales volumes by FY 2028. E2W OEMs are also well placed to serve the exports opportunity of 100-110 Mn 2W units. Select E2W OEMs with greater control over manufacturing technology can also leverage the EV know-how to capture domestic E4W opportunity, taking their overall TAM to ₹ 8.0-9.1 Tn (US$100 to 115 Bn) in FY 2028.

Automotive Electrification in India is being led by 2Ws.
All automotive vehicle segments are witnessing the electrification wave. Shared mobility segments (3Ws, commercial vehicles and taxis) are undergoing electrification to achieve better operating economics (than ICE). eCommerce and logistics players have adopted EV fleets as part of their decarbonization commitments. Central and state governments are boosting the electrification of public buses. 3Ws are getting electrified on the back of exemptions from registration and road taxes. 

Within personal mobility segments (2Ws and private 4W-Passenger Vehicles), 2Ws are well positioned to lead the electrification wave in India, unlike many developed markets. This is because of high sensitivity of Indian consumers to the initial vehicle prices of EVs versus ICE vehicles (given the lower GNI per capita vs the developed markets).

- Adjusting for purchasing power parity, the average ₹200-500 thousand (i.e. US$ 2500-6250) difference between the price of an E4W – Passenger Vehicles and ICE 4W -Passenger Vehicles in India, is quite high for an Indian consumer, unlike the consumers in the developed markets. On the contrary, the difference in prices of E2W over ICE 2Ws in India ( ₹20-70 thousand i.e. USD 250-875) is more palatable for Indian consumers, resulting in E2Ws leading the electrification in personal mobility automotives. 

- Reduced registration costs for EVs across states make the on-road price differential between E2Ws and ICE 2Ws smaller. 

Furthermore, the TCO of an E2W breaks even with a comparable ICE vehicle in <2 years while that for an E4W breaks even with that of a comparable ICE 4W in 6-7 years (assuming total lifetime of 2Ws and 4Ws to be 10 years and 15 years respectively). 
Moreover, leaner charging and infrastructural requirements of E2Ws over E4Ws also contribute to their faster adoption in India.

Scooters are leading the E2W penetration.
Stronger supply availability, compact and suitable designs, limited range anxiety, smaller (and lighter) batteries, lower initial price difference and growing popularity in the Indian market, have resulted in scooters leading India’s E2W market. Within the scooter segment, premium scooters subsegment (priced (ex-showroom) >₹100 thousand i.e. US$ 1250) have high electric penetration of ~77% (in FY 2024). With the projected decline in electric scooter prices, consumers are likely to see a higher number of options across price ranges, driving greater adoption in the lower price bracket as well.

Limited options have restricted EV penetration in the motorcycle segment to <1%, with major EV play in the > ₹100 thousand price segment. With the strengthening of supply in popular price segments through R&D & technological advancements, penetration in the electric motorcycle segment is also expected to see an uptick.

Electrification is a “flywheel” and will accelerate the overall 2W adoption in India
E2Ws are likely to capture not just the ‘replacement’ demand but also generate new 2W demand by tapping interest from households that do not currently own 2Ws, but look for lower cost of ownership, better performance, and sustainability. Moreover, by providing use-case specific design and efficiency, E2Ws are projected to better capture the emerging demand in the last mile and hyperlocal delivery segments. Thus, continuous flow of the electrification flywheel will accelerate the overall 2W adoption in India.

India accounts for 15-20% of global production for 2W and is the 3rd largest 4W-Passenger Vehicle market in the world (in terms of sales volumes), with strong growth headroom in both segments. India’s automotive market is undergoing EV-led transformation with EVs emerging as the next-gen smart products. Indian government has also provided impetus to promote domestic manufacturing and adoption of Electric vehicles through production-linked incentives for manufacturers and subsidies. 

2Ws have been at the forefront of automotive electrification in India, emerging as the more appealing alternative (as compared to 4W) to the price sensitive Indian consumer, with a lower initial price differential vis-à-vis their ICE counterparts. Technologically advanced electric vehicles are expected to disrupt the India market with greater affordability, advanced software enabled features, better consumer experience and decarbonization capabilities. E2W adoption has grown rapidly to reach ~5.4% of total 2W registrations in India in FY 2024. E2W are projected to account for 41-56% of the domestic 2W sales volumes by FY2028. E2W OEMs are also well placed to serve the exports opportunity of 100-110 Mn units globally. 

Globally, Disruptor EV OEMs have emerged as the market-leaders in the EV industry driven by their ability to innovate. These OEMs have taken a vertically-integrated approach which has enabled them to have a stronger control over the vehicle performance and costs. Other OEMs which originally manufactured ICE vehicles only, have also entered the EV market with electric products both in 2W and 4W. These players have also started building capabilities in key aspects such as battery and software etc. and are leveraging their longer experience & knowledge, financial strength and country-wide presence (through sales and service/delivery networks) to compete with the disruptor OEMs. As an emerging sector in India, it will be critical for the players to own key EV technology elements such as, software, motor & drive train, the cell & battery pack and electronics along with their interplay with each other and rest of the EV components. It will also be crucial for OEMs to rely on domestic sourcing as it will enable them to improve product quality and compliance with regulations while saving costs & import duties.

OLA ELECTRIC MOBILITY LIMITED STRENGTHS
1. Pure EV player with a leadership position in the fast-growing Indian E2W market
2. Founder led company supported by a highly experienced and professional leadership team
3. In-house R&D and technology capabilities
4. Manufacturing at scale and supply chain resilience
5. Scalable platform-based design and development approach
6. Direct to Customer Omnichannel Distribution Model
7. Eligibility for EV-related government incentives leading to cost advantages
8. Their execution capabilities

OLA ELECTRIC MOBILITY LIMITED STRATEGIES
1. Build “India” centric EV products with an “India first” strategy
2. Continue to invest in R&D to advance their technological capabilities and optimize costs
3. Building an EV hub with vertically integrated manufacturing and supply chain to improve cost efficiency
4. Develop their cell technology and strengthen their in-house manufacturing capabilities
5. Expand the product portfolio to drive market penetration
6. Strengthen our D2C omnichannel network across sales, service and charging
7. Allocate capital efficiently and focus on growth
8. Leverage the global EV opportunity

OLA ELECTRIC MOBILITY LIMITED RISK FACTORS & CONCERNS
1. They have a limited operating history in manufacturing EVs.
2. They have heavily invested in and plan to continue investing in research and development (“R&D”) and technology.
3. They design and develop certain core electric vehicle components in-house and procure certain electric vehicle components from foreign and domestic suppliers.
4. If their vehicles become ineligible for the EMPS 2024 subsidy they may become less competitive due to higher product pricing (without the subsidies), potentially impacting their business and financial performance.
5. They intend to utilize ₹ 16,000 million out of the Net Proceeds for investment into research and development purposes of their Company, which constitutes a significant portion of the Net Proceeds which they propose to raise pursuant to the Offer.
6. They intend to utilize ₹ 12,276.41 million of the Net Proceeds to fund their capital expenditure requirements to expand the Ola Gigafactory’s manufacturing capacity.
7. They currently derive their revenue solely from the sale of limited electric vehicle scooter models, if their electric vehicle scooters are not well-received by the market, their business could be adversely affected.
8. They are yet to complete a full warranty cycle in respect of their EVs.
9. Their Ola Future factory had a capacity utilisation rate of 49% in Fiscal 2024.
10. Their customers have access to a limited number of charging stations.
11. The lack of interoperability of their and other EV players’ charging infrastructures may deter potential customers from purchasing their EVs.