Exclusive: Olectra will Reach $10 Billion Valuation in 10 Years, says MD Mahesh Babu

Olectra Greentech is eyeing a $10 billion valuation over the next 10 years as the electric bus maker prepares to scale its bus business and expand into electric trucks. The company has also drawn up a 5X growth strategy for the next three years. Managing Director Mahesh Babu said the focus is on building the organisation, products and services required to support that expansion.

“What I’m doing is preparing the organisation and the strategy in such a way that we will reach $10 billion in the next 10 years,” Babu told Autocar Professional. He, however, stressed that Olectra does not work towards a particular market valuation. “While we don’t work for valuation, the intention is to create value in the company,” he said.

Olectra has so far delivered more than 4,000 electric buses in India, having begun its electric bus journey around a decade ago. The company has an order book of around 8,000 buses and plans to deliver about 2,500 buses during the current financial year, according to Babu. It is now preparing to increase volumes after averaging around 350 vehicles per quarter over the past four quarters.

Olectra's Bus Order Book and Delivery Ramp-Up

Olectra’s existing facility near Hyderabad can manufacture around 2,500 vehicles annually on a single shift, with the potential to increase this to around 5,000 by adding a second shift. But Babu said manufacturing capacity alone does not determine how quickly electric buses can be put on the road. “Plant capacity doesn’t decide the actual numbers on the road,” he said.

Scaling electric buses also requires the supply chain, financing, depots, charging infrastructure and power connections to be ready alongside vehicle production. Olectra is therefore trying to align manufacturing with deployment rather than producing vehicles significantly ahead of infrastructure and customer readiness. “Now we are ramping up. We want to exit about 600 to 700 vehicles a quarter in the last quarter of this financial year,” Babu said.

Why Electric Trucks Could Outgrow Buses for Olectra

While buses are expected to account for much of Olectra’s growth over the next three years, Babu sees electric trucks becoming an increasingly important part of the business over a longer period. The company plans to initially address heavier applications in areas including cement, steel, mining and inter-city transportation. It intends to progressively move into smaller commercial vehicle categories as the market develops.

“If you ask me 10 years from now, truck volume will be higher than buses,” Babu said. He expects the truck market to initially require work around applications, infrastructure and customer economics before volumes accelerate. Technologies such as megawatt charging could also improve the viability of electric trucks by substantially reducing charging times.

Babu believes the economics of commercial vehicles make their electrification particularly significant because buses and trucks have high daily utilisation and fuel consumption. The transition, however, will depend on whether electric vehicles can deliver tangible economic benefits to operators. “The most important is we have to create value to our fleet operators who are owning the trucks and buses,” he said.

From Proof of Concept to Scale: India's EV Bus Journey

When Olectra began deploying electric buses around a decade ago, Babu said the technology was largely being treated as a proof of concept in India. Since then, battery capacity and life have improved, vehicle costs have declined and the policy framework around electric buses has evolved. The Gross Cost Contract model has also matured as governments, state transport undertakings, financiers and manufacturers gained experience with electric bus operations.

The challenges have consequently changed. Range and battery-life concerns have eased, according to Babu, while financing is becoming increasingly important as private operators consider electric commercial vehicles. He believes EVs require longer financing tenures of around six to eight years to better match their operating lives and economics.

Babu also believes India has narrowed much of the technology gap with global EV markets, particularly in motors, power electronics, software and battery packs. Battery cells remain the significant exception, with India continuing to depend heavily on imports. He expects domestic cell-manufacturing capabilities to improve over the next five years.

For Olectra, the path from its current scale to the $10 billion ambition will therefore depend on whether it can execute the three-year 5X plan while scaling buses and establishing electric trucks as its next major business. The company is entering that phase with more than 4,000 electric buses already delivered and an order book of around 8,000 buses. The next three years will provide the first indication of how far that larger ambition can translate into operating scale.