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Mobility services provider Ola on Monday said it will set up its first electric vehicle (EV) manufacturing plant in Tamil Nadu and will invest 2,400 crore to power its new business vertical that aims to sell green vehicle technologies in India and other markets world-wide.

The plant will create around 10,000 jobs, the company said.

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"This is a significant milestone for Ola and a proud moment for our country as we rapidly progress towards realizing our vision of moving the world to sustainable mobility solutions across shared and owned mobility. This will be one of the most advanced manufacturing facilities in the world," Bhavish Aggarwal, chairman and group chief executive officer, Ola, said in a statement.

The ride-hailing company is betting big on its well-funded EV arm that aims to roll out its scooters in India, Australia, the Netherlands, New Zealand, among other places, by the first quarter of 2021.

Ola’s entry into the EV segment comes at a time when the automobile sector in India is taking rapid strides towards green technologies and sustainable transport solutions to curb the menace of pollution.

Ola’s factory will also cater to markets in Europe, Asia and Latin America, among others, the company said. The manufacturing facility will be completed in around 18 months and aims to sell around one million vehicles in its first year, according to company executives.

The company has ramped up hiring for its new business, including roping in General Motors veteran Jose Pinheiro to lead the EV vertical and Julien Geffard to head its business in Europe. The company plans to double its current headcount of around 2,000 people in its EV arm that could potentially make it the largest vertical within the Bengaluru-headquartered company.

Ola is also in talks with Karnataka to set up the plant within the state, officials said.

India’s EV segment accounts for less than 1% of total vehicle sales of which two-wheelers account for 5,00,000 vehicles, according to the Society of Manufacturers of Electric Vehicles (SMEV). Of the total two-wheelers sold in India, low-speed variants or vehicles that can travel less than 25 kmph account for 90% that leaves a large market for scooters with higher specifications for Ola to tap.

The segment has generated significant interest from large players like Hero and startups like Ather, Electrotherm, Avon, Lohia, Ampere, among others.

Ola plans to tap the expertise of Dutch electric two-wheeler maker Etergo BV that it acquired in May for its entry into EV manufacturing and had raised $250 million from Japan’s Softbank in July 2019 at a valuation of over $1 billion.

An October 2020 report by KPMG-CII (Confederation of Indian Industries) estimates that EV penetration (as a percentage of gasoline vehicles) will be as high as 30% in the next 10 years. Two-wheeler shared mobility startups like Bounce and Vogo among others are also looking at converting at least half their existing fleets into EVs by the end of next year.

Though Ola plans to roll out its scooters first, company executives say that they will venture into other categories of two, three and even four-wheelers eventually.

“We want to have a product in all EV categories," a senior official at the company said, requesting not to be named.

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