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Cab aggregator Ola’s electric vehicle arm is in talks to onboard more than 20 EV original equipment manufacturers (OEMs) including Bosch and Samsung, as it looks to locally assemble its upcoming electric two-wheelers in India, said two people aware of the plans.

Ola Electric is expected to launch its electric two-wheelers in the European market, with production already live in the Netherlands.

SoftBank-backed Ola Electric is currently in the process of finalizing the structure of manufacturing units in India, and it is looking to reduce dependence on the global supply chain by setting up a fully indigenous supply chain in the country, said the first person mentioned above asking not to be named.

“Ola Electric is currently speaking to leading India based OEMs, parts and components manufacturers. We have seen huge interest from global players to shift base from China and other markets, and the plan is to create an indigenous (manufacturing) capacity to locally manufacture 1 million EVs, mostly two-wheelers, in the next two years in India," the person added.

Ola Electric raised $250 million from the SoftBank Group at a valuation of $1 billion in July 2019, making it the second company founded by Bhavish Aggarwal to join the coveted unicorn club of startups.

The startup is also in talks with SoftBank to bring a few global EV OEMs to set up base and manufacture in India, this person added.

In May, Ola Electric acquired the Netherlands-based electric two-wheeler startup Etergo for an undisclosed amount to expand its EV prowess. It will bring Etergo’s ‘App Scooter’ in the European market this year and in Asia next year, with India being first on the list.

However, experts and EV industry observers said that dependence on China for EV sourcing components like the battery cells will remain for the foreseeable future since China owns almost 60-70% of the world’s Lithium-Ion reserve.

According to a 2019 study by Bloomberg New Energy Finance Ltd, the world had around 316 gig watt-hours (GWh) of Lithium-ion cell capacity, of which China own 73% of this capacity. The U.S., on the other hand, owns 12% of the 316 GWh global capacity.

“EV Battery cells which are a core component of the EV have to be imported from China, US, or Europe, which can then be later assembled in India, but it cannot be manufactured locally. The other route is to work with OEMs like Samsung, Panasonic, and Bosch and then procure their batter cells and assemble in India. But Ola will completely avoid sourcing it directly from China," said the second person cited above, also speaking on condition of anonymity.

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