Ola Electric has postponed its plan to integrate indigenously developed battery cells into its electric vehicles by a few months, as the company focuses on stabilising its new vehicle platforms and improving manufacturing efficiency.
“We had earlier said that we will bring cells inside our own vehicles this quarter but we have delayed that by a few months,” said Bhavish Aggarwal, founder and chairman of Ola Electric, during the company’s Q4FY25 analyst call on May 29.
“While our vehicles are ready with our own cell, we want to stabilise the Roadster and Gen 3 platform in the market first, and improve commercial production yields from 60% to 80% before we move to using the 4680 cell.”
He also provided updates on other aspects of the business, including a key cost-saving initiative and capex plans.
“Then the second point, again, in the last quarter we spoke a little bit about is our Project Lakshya, which is our cost reduction project. We are largely on track for all those cost reductions, as you can see in the chart in that section. And that savings, that benefit is already accruing to us in our Q1 outlook, as we have shared with you,” he said.
Ola Electric Mobility Ltd on May 29 said its net loss for the March quarter widened to Rs 870 crore from Rs 416 crore in the year-ago period.
The electric scooter maker's revenue in Q4FY25 fell 62% to Rs 611 crore as compared to Rs 1,598 crore in Q4FY24.
With improved cost structures and production efficiencies, Ola Electric expects stronger margins in the upcoming quarters.
“Our gross margin has been going up. Q1 is looking much better already with an outlook of about 28–30%,” Aggarwal said. “In Q2, our gross margin will further increase as we get the PLI benefit. So we are on track to get auto segment EBITDA-positive sometime around June or July.”
The company expects its auto segment to achieve profitability before generating positive operating cash flows.
“For FY26, the auto capex which includes both manufacturing and R&D will be about 150 to 200 crores, since the factory and network are already built, and major R&D on S1 Gen 3 and Roadster platforms is complete. The auto segment should see profitability first and then strong operating cash flows,” he added.
On the battery cell manufacturing side, Ola Electric is treading cautiously before ramping up its capacity.
“So for the cell, there is going to be a total capex of about Rs 1,600 crore, out of which Rs 1,100 crore is debt-financed through existing lines already, and Rs 400 crore or so is equity-financed. The capex will largely go toward expanding from 1.5 GWh currently to 5 GWh,” Aggarwal explained.
Addressing regulatory challenges the company faced in Q4, Aggarwal said the worst is over.
“Q4 had a bunch of issues around regulatory things. Those are now behind us. We had to have trade certificates in some areas. We are now fully in touch with all agencies and state-level RTOs to make sure we are either compliant or have filed whatever is needed,” he said.
“There were also talks around our February sales numbers, which caused confusion. With all regulatory agencies, we have been fully transparent and responsive to their requests. There might still be follow-up queries, but from our side, we don’t see any major business risk from regulatory aspects.”
Aggarwal said the company needs to take a “more thoughtful approach” to managing operational risks and capital allocation.
“We see the need for more mature handling of operating risks. This has been an important learning period for Ola Electric,” he said.
“Last quarter was also a quarter of important learning and introspection. As we’ve transitioned from a private to a public company, we have to manage operating risk more maturely. That lesson has been well learned. Going forward, we are sequencing capital allocation into new products and focusing more on institutionalization of operating processes, especially on the front-end, compliance, and risk.”
Looking ahead, the company has guided for 65,000 vehicle deliveries in Q1 FY26.
“We’ve given a delivery outlook of 65,000 for Q1. We’re new to this outlook stuff, so call it conservative or a median outlook. If we surprise on the upside, you can pat us on the back,” Aggarwal concluded.
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