Bhavish Aggarwal's Ola Electric bets on ₹90 crore-a-month cost cuts to hit breakeven

Electric two-wheeler maker Ola Electric Mobility Ltd on Wednesday claimed that it is saving about ₹90 crore per month after launching an initiative last November to reduce costs. As a result, the EV maker said it expects to achieve automotive segment EBITDA breakeven in the next quarter.

“This initiative has delivered a sustainable cost reduction of ₹90 crore per month. As a result, the Company expects to achieve Automotive segment EBITDA breakeven for the next quarter (Q1 FY26), with the financial impact of these initiatives beginning to fully reflect from April 2025,” Ola Electric said in a regulatory filing.

This comes at a time when Ola Electric is reportedly looking to fire more than 1,000 employees to slash costs.

Ola Electric Mobility said it has successfully finished implementation of its network transformation and opex (operational expenditure) reduction programme, a company-wide initiative launched in November 2024 with an aim to reduce cost and improve customer experience.

This programme has encompassed distribution network transformation projects like shutting all regional warehouses and shipping vehicles, spare parts and accessories from the factory directly to stores, automating registration and other processes, and productivity improvements in the sales and service network, the Bhavish Aggarwal-led company said.

These structural improvements position the company for strong long-term profitable growth, said Ola Electric.

“In addition to cost savings, these changes have resulted in reducing average vehicle inventory from approximately 35 to 20 days, and reducing delivery time for customers from 12 days to 3-4 days,” it said.

Ola Electric's net loss for the October-December quarter widened to ₹564 crore from ₹376 crore during the corresponding period last year. In an analyst call after the company announced its third quarter results, Bhavish Aggarwal, chairman and managing director of Ola Electric, said he expects EBITDA break-even in auto business with monthly sales of 50,000 units. “Now when we get there, it depends on market conditions as well as EV penetration. But we do feel in the next few quarters, we can get to about 50,000 monthly sales, which takes us to an auto segment EBITDA positive,” he said. That’s over twice the sales reported by the company in January. Ola Electric sold 24,376 EVs in January, according to registration data sourced from the government’s Vahan portal.

As per Vahan, Ola’s EV registrations in February stood at 8,647 units. The pure-play automaker, however, claimed it sold more than 25,000 units in February with a market share of over 28%. “The vehicle registration process transformation is in its final stages. The company’s daily registrations have improved significantly, increasing to over 800 per day and crossing the average daily sales for Jan’25 - Feb’25,” it said.