Ola Electric posts Rs 428 crore loss in Q1FY26, revenue rises to Rs 828 crore

In an unexpected turnaround for India’s electric mobility sector, Ola Electric has reported stronger-than-anticipated financial results for the quarter ended June 30, 2025.

Despite growing concerns about falling EV scooter demand and cost pressures across the industry, the company posted revenue of Rs 828 crore in Q1 FY26, marking a 35% jump from the previous quarter. Net loss for the quarter stood at Rs 428 crore. On a year-on-year basis, the company’s revenue declined by 50% from Rs 1,644 crore in Q1 FY25, while its net loss widened by 23.3%.

Vehicle deliveries also surged to 68,192 units, up 32.7% from Q4 FY25, defying earlier forecasts that predicted volumes would drop below 60,000 due to weak consumer sentiment and ongoing price corrections.

The results come just weeks after Kotak Institutional Equities forecast a tepid quarter for Ola Electric, projecting revenues of Rs 685 crore and a net loss of Rs 459 crore.

Auto segment turns profitable in June

Ola Electric reported that its auto business turned EBITDA positive in June. For the full quarter, auto segment EBITDA losses narrowed sharply to -11.6%, a notable improvement from -90.6% in Q4 FY25. On a consolidated basis, EBITDA losses stood at -28.6%, reflecting broader structural improvements across the board.

Much of this turnaround is attributed to “Project Lakshya,” an internal cost optimisation program aimed at rationalising operational expenditure and improving productivity. Under the initiative, monthly auto opex dropped from Rs 178 crore to Rs 105 crore, while consolidated opex is now down to Rs 150 crore. Ola Electric has set a target of reducing it further to Rs 130 crore by the end of FY26.

As a result, the company’s free cash flow improved dramatically, from -Rs 455 crore in Q4 FY25 to -Rs 107 crore in Q1 FY26.

Margin recovery through product shift

The company also credited its third-generation (Gen 3) scooters for driving margin recovery. These new models now account for 80% of total sales and offer better unit economics, lower warranty claims, and improved performance. The strategic pivot helped Ola Electric maintain healthy gross margins even as a growing share of mass-market scooters exerted downward pressure on average selling prices (ASPs).

Brokerage firms had previously warned that increased focus on budget-friendly variants could erode profitability. But Ola’s product mix, leaning on improved in-house technology and production processes, appears to have offset those risks for now.

A central part of Ola Electric’s growth strategy remains its in-house tech stack, a rarity in India’s still-nascent EV manufacturing ecosystem. The company reiterated plans to deploy its proprietary 4680 “Bharat Cell”, developed using a dry coating process, in vehicles beginning this Navratri.

With a current cell production capacity of 1.4 GWh, Ola aims to scale it to 5 GWh by FY27, a move that could significantly reduce reliance on imports and boost long-term margins.

The company is also working on heavy rare earth-free motors, expected to go into production in Q3 FY26, and an in-house anti-lock braking system (ABS), which is scheduled for release in January 2026. These efforts are part of a broader push by Indian EV companies to reduce import dependencies and build a domestic EV supply chain.

The company has set a vehicle sales target of 3.25 to 3.75 lakh units for FY26 and expects to generate between Rs 4,200 crore and Rs 4,700 crore in revenue during the fiscal year. It also expects its auto segment EBITDA to cross 5% for the full year, with sustained profitability starting from Q2 onwards—helped, in part, by benefits under the Production Linked Incentive (PLI) scheme that kicks in for Gen 3 models.