Ola to buy 1,500 acres in TN for EV factory

NEW DELHI: In perhaps the biggest deal for a factory in the Indian automobile industry, the Tamil Nadu government is understood to have approved a proposal by Bhavish Aggarwal’s Ola for acquiring around 1,500 acres in the state. It will house the company’s electric vehicles manufacturing facility, a component supplier ecosystem, and a battery cell manufacturing plant.

Sources said that an announcement of the same is likely to be made over the next few days in the presence of Aggarwal, who is cofounder of Ola, apart from top functionaries of the Tamil Nadu government.

While the scale of the investment is not yet known, it is believed that Ola has indicated to the government that it expects investments to the tune of Rs 1 lakh crore by the end of the decade in the ‘electric vehicles’ park that it is setting up at the Krishnagiri district in Tamil Nadu, sources said. The company already has around 500 acres in the area and is now adding a much bigger land parcel of 1,500 acres as it looks to not only expand the capacity of its electric two-wheelers business, but also looks at making electric cars as well as batteries in the area. Importantly, it wants to house all its critical vendors and suppliers in the same area.The battery plant is being set up to meet the growing needs of Ola’s electric vehicles business, and this flows from the company winning production-linked incentive (PLI) benefits under the government’s advanced cell chemistry (ACC) for EV batteries.

On the vehicles side, Aggarwal — who launched his company’s first scooter last year — has an aggressive expansion plan. Not only does he plan to increase the number of scooter models, he also wants to introduce motorcycles that may come in the next one year or so.

Aggarwal has time-and again claimed that petrol and diesel vehicles are in the last leg of their existence, and thus is also working aggressively for an electric car project.

The Tamil Nadu government has been gung-ho on the project as it looks to add production of sustainable and green products in the state. The state had been one of the biggest industrial hubs for automobiles at one time with investments from companies such as Hyundai, Ford, Ashok Leyland, Royal Enfield, Renault-Nissan and BMW, though of late it has lost out on new factory opportunities, which have moved to Gujarat and Haryana. The state government feels that with a big EV supplier ecosystem as part of the Ola project, it will be able to attract other electric manufacturers to the state.