Ola Electric Q1 loss widens to ₹428 crore; revenue halves to ₹828 crore

Bhavish Aggarwal -led Ola Electric Mobility ’s loss widened 23.3% year-on-year to ₹428 crore for the quarter ended June 30, 2025, while its revenue from operations halved from ₹1,644 crore in Q1 FY25 to ₹828 crore in the first quarter of FY26.

Ola Electric, which was India’s top selling electric scooter maker in FY25, has fallen behind legacy rivals such as TVS Motor Company and Bajaj Auto in the first quarter of the ongoing fiscal.

“Over the last year the EV industry has evolved from a fast growth phase to a steady 20%+ annual growth coupled with reduced government incentives and increased competitive intensity. After the early adopters have been converted to EVs, now the “middle mass” customers need to be converted. In sync with this Industry dynamic, we’ve made a pivot to our strategy over the last two quarters from aggressive penetration to balanced profitable growth,” the company said in a letter to shareholders.

“Our goal in this phase is to consolidate and institutionalise our operations, improve our margins, and get ready for the next phase of growth driven by our expanding product portfolio, improving distribution and engaging the next set of customers entering the industry,” the letter said.

Ola Electric said the earnings were in line with guidance on both top line and bottom line. “We delivered 68,192 vehicles and the auto business crossed a major milestone by being EBITDA positive for the month of June,” it said.

Gross margin was 25.6% despite PLI (production-linked incentive) contribution being only 1.8% as Gen 3 scooters and bikes will get certification in Q2 and Q3 respectively, the EV maker said. “This is our best GM performance ever, driven by Gen 3 BOM (bill of materials) reduction as a result of our focus on vertical integration and in house tech (and this trend will continue over the next few quarters. Our FY26 exit target is to have our GM in the range of 35-40% with PLI benefits, which will be around ₹40,000 - ₹45,000 per vehicle,” the letter stated.

The Bhavish Aggarwal-led EV maker said its cost reduction programme ‘Lakshya’ delivered on its targets to reduce auto operational expenditure to ₹105 crore a month from ₹178 crore a month in Q3 FY25. “As a result Auto EBITDA has improved to -11.6% and consolidated EBITDA has improved to -28.6% from -113.9% in Q4. There is more room to optimise opex over the coming quarters and we will be targeting bringing this down further to around ₹130 crore a month through FY26,” it said.

Rare earth magnet curbs by China pose a major long-term risk for auto original equipment manufacturers (OEMs), said Ola Electric. “Because we engineer and manufacture the motor, motor controller and software all in house, we have multiple strategies to manage this disruption. For the short term, we have reasonable inventory levels and have been sourcing the rare earth magnets from two countries of origin to keep optionality in case this eventuality occurs. And since we are not reliant on intermediary motor suppliers, we’ve been able to change over quickly and ramp up other sources of rare earth magnets,” it said.