Synopsis
Ola Electric Mobility has missed its timeline for starting cell manufacturing at its Gigafactory amid ongoing challenges, including layoffs. The company is working with authorities following a formal notice from IFCI Ltd regarding milestone achievement.Key Takeaways
- Ola Electric has missed the cell manufacturing deadline at its Gigafactory.
- The company has received a notification from IFCI Ltd about milestone non-achievement.
- Ola Electric's losses increased to ₹564 crore in Q3 FY25.
- The company is laying off over 1,000 employees amid financial struggles.
- Production is set to begin in fiscal 2026 with a capacity goal of 20 GWh by 2027.
New Delhi, March 5 (NationPress) In the face of ongoing challenges and job reductions, Ola Electric Mobility has unfortunately failed to commence cell manufacturing at its Gigafactory as scheduled.
As per a stock exchange communication from the company, "We wish to inform you that we have received a letter dated March 3, 2025, from IFCI Ltd. regarding 'Subject Non-Achievement of Milestone-1' in accordance with Schedule M of the Programme Agreement dated July 28, 2022."
"The company is currently in active discussions with the relevant authorities on this matter and is preparing an appropriate response," stated Ola Electric.
IFCI serves as the project management agency for the Production-Linked Incentive (PLI) scheme for advanced chemistry cells (ACCs). Ola Electric's subsidiary, Ola Cell Technologies Pvt Ltd, is one of the beneficiaries of this scheme.
Industry insiders report that Ola Electric has effectively missed the deadline to initiate cell manufacturing operations at its Gigafactory.
Similar notifications have also been dispatched to Reliance New Energy Pvt. and Rajesh Exports Ltd, who are likewise beneficiaries of the PLI scheme.
Under Bhavish Aggarwal's leadership, Ola Electric was the first company to receive approval for localized cell manufacturing under the PLI scheme in October 2023.
The company was awarded the highest capacity of 20 GWh for its proposal, which led to the subsequent construction of the Gigafactory.
During the third-quarter earnings call, Aggarwal mentioned that the Gigafactory is expected to start operations in the first quarter of fiscal 2026.
The goal was to reach a production capacity of 5 GWh in the first year and 20 GWh by 2027.
The initial product will be a 4,680 NMC cell, followed by LFP cells in the subsequent years. To date, Ola Electric has invested ₹1,200 crore in the Gigafactory.
In its third-quarter report (Q3 FY25), Ola Electric registered a significant net loss of ₹564 crore, marking a 13.94% increase compared to the ₹495 crore loss in the prior quarter (Q2 FY25).
On a year-over-year (YoY) basis, the net loss surged from ₹376 crore in the same quarter last year (Q3 FY24), reflecting a considerable 50% increase.
The company has cited heightened competition and service difficulties as contributing factors to the increased losses during the quarter.
Reports suggest that Ola Electric Mobility is laying off over 1,000 employees and contract workers, marking its second round of job reductions within a few months.
