Where is Ola Electric Headed Amidst Mounting Losses

As India’s most-watched and ambitious electric vehicle (EV) startup, Ola Electric has challenged conventions by expanding beyond ride-hailing into EV manufacturing. When it did that, it faced ridicule, ire, and admiration. Yet it forged ahead, scaling volumes and growing its customer base. But in the real world, innovation and ambition at some point must usher in tangible business outcomes. That’s what investors want: burn, build, and turn black. But Ola is still in the red.

If we were to go by its FY25 financial numbers, Ola is still caught between the devil and the deep blue sea. Despite leading the electric two-wheeler market in terms of volume, the company is now navigating through deep financial strain, operational turbulence, and shifting investor confidence.

So where exactly is Ola Electric headed?

The Devil is in the Details: The Fine Print

On paper, FY25 should have been a year of triumphs. The company delivered over 3.59 lakh electric two-wheelers during the year, capturing a commanding 30 percent share of the segment (as per VAHAN data). It also became the first major EV player in India to foray into electric motorcycles with the launch of the Roadster series, a crucial move in a country where motorcycles outsell scooters nearly 2-to-1. One needs to acknowledge the company’s intent to scale its product portfolio to diverse consumer personas.

However, these achievements have come at a steep price. FY25 losses stood at ₹2,276 crore as compared to ₹1,584 crore in the previous year (FY24).

What Went Wrong?

To start with, Ola Electric made aggressive bets on product expansion, scaling its direct-to-consumer network, and deep vertical integration (where it builds its own battery cells, motors, and software). These strategic choices are long-term value drivers, but in the short term, they will have a big hit on the bottom line, and EBITDA is still miles ahead.

On the other hand, if one looks at the delivery volumes, they declined quarter after quarter in FY25, hitting a low of just 51,375 units in Q4 compared to 1.25 lakh in Q1. Revenue dropped accordingly. The Q4 consolidated revenue came in at ₹649 crore, down from ₹1,687 crore in Q1 (best quarter), marking a dramatic reversal in momentum in Q4.

Adding more red, Q4 alone saw a net loss of ₹870 crore, nearly double the ₹416 crore loss in the same quarter the previous year. During Q4, the company also made a one-time ₹250 crore increase in warranty provisioning to account for future claims on Gen 1 and Gen 2 scooters.

Numbers Through the Industry Lens

Ola Electric’s story of losses over FY25 is not isolated, rather rooted in the larger macro trends shaping the EV market. If one looks at FY25, we saw a broader slowdown in EV adoption due to shrinking government subsidies and softer urban demand. Electric two-wheeler growth slowed to 22 percent, while traditional petrol-based bikes and scooters maintained steady volume. In this context, even legacy OEMs like TVS and Bajaj gained ground, leveraging their established dealer networks and ramped-up EV offerings.

Ola Electric believes as it enters FY26, it is confident of urban demand returning on the back of tapering inflation and declining interest rates, while it says it will continue to focus on its efforts in making the EV revolution more broad-based.

The headwinds over FY25, macro plus company-specific, can be attributed to the increased competitive intensity putting pressure on Ola’s market share and pricing power, just as it was investing heavily in network expansion and product R&D. It's indeed a delicate balance between product innovation and profits.

A Shift in Gear and Lanes

In response, Ola Electric is attempting to reset its operational foundation. Under “Project Lakshya,” the company has brought down its monthly automotive operating costs from ₹135 crore to ₹121 crore as of April 2025, with a target of ₹110 crore by June. The company believes that auto EBITDA break-even is now possible at monthly sales of just 25k units, compared to the earlier threshold of 30k units.

This cost rationalization is supported by their new Gen 3 platform, which powers most of their S1 scooters and the Roadster motorcycles. Gen 3 boasts 20 percent more range and power, and 11 percent lower cost of production compared to Gen 2. These efficiencies are essential to improving Ola’s gross margins, which improved from 14.8 percent in FY24 to 20.5 percent in FY25.

Looking ahead to Q1 FY26, Ola has forecast revenues between ₹800 and ₹850 crore, with gross margins improving approximately by 35 percent by Q2 FY26. While EBITDA might still be negative, the company believes in steady gains through the year.

Decoding the Investor Pulse

Investor sentiment toward Ola Electric is currently cautious but not dismissive. With the FY25 results now public, analysts are closely watching two factors: whether Ola can achieve operational breakeven in FY26 and how it manages cash burn in the meantime. The company says it has ₹4,000 crore in cash and cash equivalents and is considering raising ₹1,700 crore in non-dilutive debt to refinance existing loans. This gives it some cushion, but it cannot afford another year of deep losses.

The Road Ahead: Navigating Risk with Resilience

To Ola’s credit, it continues to lay emphasis on innovation and vertical control, much like Tesla and BYD, which it often cites as benchmarks. According to available data sources, the company now manufactures or engineers 89 percent of its EV components in-house. It has also developed its own 4680-format “Bharat Cell” for EV batteries, currently undergoing tests at its Gigafactory.

If Ola succeeds in commercializing these cells and scaling its Roadster lineup across semi-urban markets, where ICE motorcycles still dominate, it could unlock fresh demand and higher margins.

The company’s digital-led approach also remains a differentiator. Its MoveOS software now powers 20 different vehicle models and includes high-tech features like emergency SOS, geo-fencing, smartwatch connectivity, and even theft detection. These digital enhancements create new revenue streams through upgrades and services. The company says MoveOS achieved 58 percent overall adoption and 67 percent within premium variants, creating a high-margin revenue stream and reinforcing its technology-led differentiation. Commission income formed ~2.3 percent of total income in Q4 FY25.

Yet, the risks remain very real. Execution on such an ambitious roadmap requires not just capital and innovation, but operational discipline, an area Ola has historically struggled with. From social media missteps to quality complaints and service delays, the company must rebuild trust across stakeholders.

Peering Through the Windshield

Clearly, the company believes the numbers only signify a bend, not an end. Ola Electric’s story is at a crossroads. It has the tech stack, the scale, and the ambition to lead India’s EV transition. But it also faces a critical year ahead where it must prove that these investments can translate into a viable, profitable business.

FY25 was a lesson in overreach. FY26 must be a story of recalibration. According to Ola, FY26 will be focused on scaling revenue and operating leverage as it marches towards sustainable profitability. With a robust product roadmap, vertical integration and R&D focus, and strong distribution and service infrastructure, Ola says it is well-positioned to drive the next phase of EV adoption in India across both scooters and motorcycles.

The company has set all the pieces in motion, that includes tighter cost control, a stronger product mix, and a clearer profitability path. Whether that will be enough to turn investor hesitation into confidence is something only time will tell.

But one thing is clear: in the race to electrify India’s roads, Ola can’t afford to stall again. Will it jumpstart in FY26?

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