E-scooter manufacturer Ola Electric is contemplating a bid for lithium mining rights currently auctioned by the government. The move aligns with the Centre’s initiative to bolster EV battery manufacturing by auctioning critical minerals. Last year, the Mines and Minerals (Development and Regulation) Amendment Bill was passed, enabling private entities to mine essential minerals like lithium. This legislative shift aims to foster economic development and national security.
Significance of Critical Minerals Auction
The auction of lithium blocks gains prominence in India’s ambitious plan to elevate electric vehicle (EV) market share from 2% to 30% by 2030. With a commitment to energy transition and achieving net-zero emissions by 2070, critical minerals play a pivotal role. The government expects to generate approximately Rs 45,000 crore ($5.4 billion) through the ongoing auction of 20 blocks across eight states.
Ola’s Interest and Considerations
Sources reveal that Ola Electric has expressed interest in the auction, actively participating in meetings and raising queries on land acquisition and potential minerals alongside lithium. However, the final decision is pending, contingent on factors like global lithium prices and the feasibility of mining. This strategic move by Ola is integral to its domestic production plans for lithium-ion batteries, reinforcing its commitment to vertical integration within the supply chain for operational efficiency and cost-effectiveness.
Path to Vertical Integration
Ola’s pursuit of lithium mining rights signifies its strategic roadmap toward vertical integration. The company aims to domestically produce lithium-ion batteries, crucial components for electric vehicles. By exploring mining opportunities, Ola seeks to secure a steady supply of lithium, contributing to its self-reliance in the production of key EV components. This aligns with broader industry trends and Ola’s commitment to sustainable and self-sufficient electric mobility solutions. Securing mining rights for lithium would be a pivotal advantage for the startup, particularly as it progresses with the construction of its Ola gigafactory, anticipated to boast a substantial production capacity of 20 GWh.