Ola Electric is making significant moves to reverse dwindling sales and increasing competition in the electric two-wheeler (e2W) segment. Previously a market leader, the firm experienced its deliveries plummet sharply, expanding losses, and increasing pressure from conventional OEMs. Ola is now counting on its recently launched Roadster motorcycle lineup to counter losses and next-generation scooters to achieve momentum.
The firm started delivering the Roadster last month, the first large OEM to roll out an electric motorcycle to the mass market. With the scooter segment half the size of motorcycles, Ola feels the Roadster offers a compelling value proposition as a total cost of ownership. In the meantime, the launch of various models that had been in the pipeline earlier, including the S1Z scooter, three-wheelers, and products made for gig workers, has been put on hold.
In order to stem its falling market share, Ola is also fortifying its distribution network, simplifying the process of registration of vehicles, enhancing delivery timelines, as well as instituting cost-reduction measures. These are a part of the larger “Project Vistar” initiative of curbing operational inefficiencies.
“So cost savings are on track and due to both cost savings as well as our network Project Vistar, both combined, our breakeven point of our auto business segment EBITDA has now reduced to nearly 25,000 units from previously what we had shared with you and this is due to the gross margin increasing on one one side and then our cost decreasing on the other side,” Co-founder and CEO Bhavish Aggarwal explained to analysts following the FY25 results.
For the quarter, Ola has projected revenue of ₹850 crore, roughly 65,000 deliveries, and a gross margin of 28–30%, up sharply from Q4. In the March quarter of the last fiscal year, however, deliveries had almost halved year-on-year and gross margin was just over 19%.
Net loss expanded to ₹870 crore from ₹416 crore last year, and revenue from operations declined 62% year-on-year to ₹611 crore.
In a significant change, Ola Electric has also recognized the influence of heritage electric two-wheeler OEMs for the first time. “We have witnessed rising competitive pressure from conventional OEMs across all levers such as distribution, product growth and discounting. This, along with operating difficulties in scaling up our direct to customer (D2C) sales and service network and lower growth rate of EV penetration in FY25 led to quarter-on-quarter loss of market share,” the company said in an investor presentation.