- Ola Electric reported a net loss of ₹418 crore for the quarter ended September 30, 2025 (Q2 FY26), improving from a loss of ~₹495 crore a year earlier.
- Revenue from operations plunged 43% year-on-year to about ₹690 crore from ~₹1,214 crore in Q2 FY25.
- The auto segment achieved its first-ever positive EBITDA (about 0.3%) in Q2, signalling improvement in core operations.
- Gross margin in the auto business expanded to 30.7%, up ~510 basis-points from a year earlier.
- Vehicle deliveries fell significantly — the company reported ~52,666 units in Q2 FY26.
Why This Matters
- This performance signals a shift for the company: from prioritising volume growth to focusing on margin improvement and cost discipline.
- Despite revenue pressures, the fact that the core auto business turned EBITDA positive is a meaningful operational milestone.
- However, the steep drop in revenue highlights how competitive and challenging the electric two-wheeler market in India has become, with legacy players gaining ground.
- For investors, this quarter may be seen as a maturation phase: less emphasis on rapid scaling, more on stabilising business and moving toward sustainable profitability.
Key Risks & Challenges
- Falling volumes: A nearly halved revenue and steep delivery drop mean market share and demand remain weak.
- Market pressure: Discounting, competition (from established two-wheeler brands) and slowing overall EV growth in some segments pose risks.
- Capital requirements: Ola is still investing heavily (battery cells, gigafactory capacity) and must translate the investments into scalable returns.
- Macroeconomic & regulatory risks: EV adoption is influenced by subsidies, input costs (especially batteries), supply-chain constraints, and consumer sentiment in India.
What to Watch Going Forward
- H2 FY26 performance: The company has set ambition for ~100,000 deliveries in H2 and aims to hit gross margin ~40% in the auto business by Q4. mint
- Battery/cell business ramp-up: Ola is scaling its in-house cell manufacturing (4680 Bharat cells), which may impact cost structure and margins in the medium term.
- Revenue guidance: For FY26, Ola has revised its consolidated revenue estimate downward (~₹3,000-3,200 crore vs earlier higher target).
- Competitive positioning: How Ola fights back against the resurgence of legacy two-wheeler makers in the EV space will be crucial.
Final Thoughts
Ola Electric’s Q2 result — a ₹418 crore loss but with operational improvements — reflects a company transitioning. The pared loss, margin improvements and auto business EBITDA turnaround are positive signs. Yet, the steep revenue and volume decline underscore the magnitude of the challenge ahead. If Ola can execute on its cost-control, battery-integration and market-positioning strategy, it may be set for better stability. But execution risk remains high.
