Ola Electric, a prominent player in India’s electric two-wheeler market, has reported a significant widening of its net loss for the third quarter ending December 2024. The company’s net loss increased to ₹564 crore, up from ₹376 crore in the same period the previous year. This represents a year-on-year increase of approximately 50%.
The company’s revenue from operations experienced a decline, falling 19% to ₹1,045 crore from ₹1,296 crore in the corresponding quarter of the prior year. This downturn in revenue is attributed to a combination of factors, including heightened competition in the electric two-wheeler sector and challenges related to service quality.
In terms of unit deliveries, Ola Electric reported a decrease, delivering 84,029 units during the December quarter. This is a decline from the 86,775 units delivered in the same quarter the previous year and a further drop from the 98,619 units delivered in the preceding quarter. The reduction in deliveries underscores the competitive pressures the company faces in the market.
Following the announcement of these financial results, Ola Electric’s stock experienced a decline. The shares fell by 3.44%, reaching a day’s low of ₹67.61 on the BSE. Over the course of two trading sessions, the stock has decreased by a total of 6%.
Despite these challenges, some financial analysts maintain a cautiously optimistic outlook on the company’s future. For instance, Goldman Sachs has retained a ‘Buy’ rating on Ola Electric’s stock, setting a target price of ₹101. The firm cites the company’s strong revenue growth and plans for in-house component integration in its Gen 3 portfolio as positive indicators.
Ola Electric has acknowledged the hurdles it faces, particularly in terms of service quality and market competition. The company has incurred a one-time cost of ₹1.1 billion to address service quality issues and has also spent ₹130 million on restructuring efforts, including job cuts. These initiatives are part of a broader strategy to enhance customer satisfaction and streamline operations.
In response to the competitive landscape, Ola Electric has been offering significant discounts on its entry-level scooters to attract price-sensitive customers. While these discounts have boosted sales volumes, they have also led to a decrease in revenue per unit, contributing to the overall decline in revenue.
The company remains committed to its long-term vision of leading the electric vehicle market in India. Ola Electric is investing in the development of its own battery cells, aiming to integrate them into its vehicles by the first quarter of FY26. This vertical integration strategy is expected to improve cost efficiency and enhance the performance of its electric scooters.
Additionally, Ola Electric is expanding its product portfolio to include electric motorcycles, targeting both mass and premium segments. The company plans to launch its first electric motorcycle in March 2025, with products priced to capture a wide range of the market, from ₹74,999 to ₹249,999 across three models and eight variants.
To strengthen its market presence, Ola Electric is also focusing on expanding its retail footprint. The company currently operates 782 company-owned stores and plans to increase this number to 2,000 by March 2025. This expansion aims to enhance customer accessibility and improve service infrastructure across India.
While the recent financial performance highlights the challenges Ola Electric faces in a competitive market, the company’s strategic initiatives in product development, vertical integration, and retail expansion reflect its commitment to long-term growth and market leadership in India’s evolving electric vehicle landscape.