Bhavish Aggarwal says Gen-3 scooters, bikes key to Ola Electric’s growth in FY26
The electric vehicle maker’s net loss widened led by a sharp fall in revenue for the April-June 2025 quarter. Ola expects fiscal year 2025-26 (FY26) revenue to be between ₹4,200 crore and ₹4,700 crore.
The company’s current market capitalisation is at ₹19,782.57 crore, and its shares have shed more than 50% over the past year.These are edited excerpts of the interview.
Q: You are projecting for the auto EBITDA to turn positive, the business itself to generate positive cash flow by FY26, etc. But before the financials, because the financials are the end product, is the first story. Do you believe that a lot of the product-related issues, especially on the after-sales side, have been fixed?
A: I will just highlight two or three key things from our earnings. Our auto business achieved the EBITDA guidance we had given for the April-June 2025 quarter, and more importantly, in June, we were EBITDA positive. So in that sense, it’s probably a very important milestone for the company to be EBITDA positive for the first time ever in our journey.
A second highlight was also the cash flows. Our operating cash flows came in almost neutral, at a negative ₹27 crore for the whole quarter. Both the profitability and cash flows have reached this level because of new product introductions by us over the last three months. Specifically, our Gen-3 scooters have done well in the market. Almost 80% of our vehicles sold are Gen-3 products now. Even though Gen-3 is priced slightly higher than Gen-2, consumers are preferring our Gen-3 product.
Our bike has seen very good early traction and interest from everyone. We are releasing the bikes into stores in a calibrated manner, so bikes are available in 200 stores now, and scaling up through this quarter. By the time the festive season comes in, Navratri comes in, we will be across most of our stores.
Some of the product comments that you shared, the service issues which were there in the October-December 2024 quarter of last year, have since largely been dealt with. Most of the service challenges we had have been fully resolved. It was not product-linked, as I had shared then; it was network-linked. Our network scale had to go up to service the extra volumes that we had sold in the last three or four years.
Just to underline and remind everyone, we’ve sold almost a million vehicles, which is still almost 2x that of our nearest competitor. So in that sense, the number of vehicles on the road for us is much higher than for our peers.
Q: The next step is getting the products to the market. And here, at least over the last couple of days, the headlines out of Maharashtra seem again pretty confusing. Reports are indicating that 90% of the Ola stores will have to be shut down because there’s an issue with licences and permits, etc. Can you just set the record straight on this and how you’re engaged with the state government? Maharashtra is a big state when it comes to EV sales.
A: Every state is important to us. About four or five months ago, we acknowledged this issue that we had opened all these stores, and some local-level licensing and certification had to be done, and we have since then been doing it. A lot of ground has been covered across all states. Maharashtra is a slightly more nuanced state in terms of the level of local documentation required, but we are covering that ground, and we are continuing to engage with the state government. There has been no official communication to us about this. So maybe it is more speculative, but from our side, we have been very diligently covering all the ground on local regulations to make sure all our stores are compliant with any local regulations across the country.
Q: Could it impact your July-September 2025 quarter sales? You are saying you’ve officially not received any notification from the government? You have 450 stores in the state, right?
A: Thereabouts, yes.
Q: The state government has not communicated its intent to seal the stores or shutter the stores?
A: Like I said, we are going through the process of getting the local regulations, and in that process, there will be a certain set of engagements with different authorities, state-level or even local-level, and we are getting through that whole process. In terms of sales impact, a lot of our sales are done online, so they are not dependent on the store. Even when we have a large number of stores, they are largely used as places where customers come and pick up their vehicles, because the sale happens online. Unlike traditional dealerships, we don’t stock inventory in our stores.
Q: Should investors expect any impact on the July-September 2025 quarter sales because of this or not?
A: No. The impact should be very minimal, if at all.
Q: You have entered the bike market, and you are sounding very optimistic there. Now, you have given this guidance of around 3,25,000 to 3,75,000 units. How much of it will come from bikes, and what’s the traction you’re seeing on the ground?
A:
Bikes are getting a lot of positive response on social media and from our customers and community. It’s a great product. I have been riding the bike around Bangalore all day, all through the last few months. Like I said, we are in a calibrated way ramping it up across different stores. It’s a new category for us, and a new category for the EV industry at scale. So we want to make sure the new product establishes itself well in a phased manner. The response has been very strong, and we feel very confident about the product doing well.
Q: Bikes will be what, mid-teens as a contribution to the total volumes?
A: For the whole year, maybe slightly higher.
Q: Since you spoke about the feedback and social media, service turnaround time, is that in check? We keep getting these responses to some of our earlier interviews as well, asking, “Are the customers being taken care of in after-sales?” Are things better?
A: Things on service have improved a lot since the October-December 2024 quarter. We are continuing to focus on improving and institutionalising our operations on the front end. It’s in my note, also in the shareholders’ letter, that one key area of management focus will continue to be our entire front end, which includes sales, service, fulfilment times, etc. Getting more stores live for our bikes and for our Gen-3 products is a very core management focus for this quarter.
Q: So, service turnaround time is one day?
A: Service turnaround times are industry standard for us. Also, whatever the EV industry runs at, we will be running at the same time. We want to do better than that. So a lot of initiatives are underway to do better than that.
Also Read | Ola Electric shares were up 20% after Q1 results, but some analysts unconvinced
Q: In terms of sales volume, etc., you have to turn that around a little bit. If you’re saying that the service is now much better, in line with industry average, people need to know about it.
A: Our customers know about it. We are one brand that hardly advertises, and yet people buy our products in very high volumes. The April-June 2025 quarter over the January-March 2025 quarter has also increased in volume. So the numbers speak for themselves. On the ground, in the community, the sentiment is generally positive.
Q: We saw many instances of discounting over the last few quarters for some of the products. Have we hit a bottom there, and have things stabilised?
A: Instead of that, I’ll give you our gross margins. If you look at our gross margins in the April-June 2025 quarter, they were 26%. This quarter was without any meaningful production-linked incentives (PLI) benefit. So even without PLI, our gross margins are 24%, and this is industry-leading by far. So, discounting or no discounting, our business and unit economics do well. In June, the auto segment turned EBITDA positive because gross margins came in very good, and that’s a function of our new products, Gen-3 and bikes, starting to scale. Second, our OPEX reduction programme has also delivered on the targets we promised the Street.
Q: On the auto side, EBITDA margins, you’re looking at what, 5% or so?
A: For the whole year, yes. This quarter should be in the positive territory.
Q: At the blended company EBITDA level, and at the net profit level, there’s still a loss – the loss is reduced, but it’s still about ₹428 crore. Can you give us some timelines? When do you turn profitable first at the overall EBITDA level, and then eventually at the profit after tax (PAT) level?
A: We’ve given a fairly detailed outlook in our shareholders’ letter this time. For our auto business, we said that this full year should be EBITDA positive. The July-September quarter itself will be EBITDA positive. Even if cash flows by the end of the year, our auto segment will be making both operating cash flow and free cash flow. There is still some investment to be done in the cell business to get to the 5-gigawatt-hour capacity, so we are allocating capital this year for that capex. Beyond that, the auto business’s profitability should balance out whatever investment is needed in the cell business, because the auto business is where the real volume is. Sometime next year, I don’t want to give a hard number right now, but we’ll keep sharing more specific, granular updates, quarter on quarter.
Q: In the fiscal year 2026-27 (FY27), will you be overall EBITDA positive?
A: I am not sharing a number there.
Q: Any queries from the Securities and Exchange Board of India (SEBI)? There were various allegations, source-based information that we heard as well. Have you been engaging with them? Have you heard anything? Is there something that your shareholders need to worry about?
A: The confusion that happened was the registration and registration numbers mismatch in February or March. In our January-March 2025 quarter results, we clarified that with a proper walk-through of how the numbers stacked up. In the public domain, this issue is behind us. SEBI and I had many conversations, and whatever questions they asked, we clarified.
Watch the interview in the accompanying video
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