Ola Electric Focuses on Profitability, Puts Electric Car Project on Hold
In a recent development, Bhavish Aggarwal, the Chairman and Managing Director (CMD) of Ola Electric, made a significant announcement regarding the company’s future plans. For those eagerly awaiting Ola’s electric car, there’s some disappointing news—the project is currently on hold. The company has shifted its focus toward achieving profitability by increasing the production capacity of electric scooters and motorcycles, and by emphasizing local manufacturing of battery cells.
Ola Electric’s New Profit Strategy
Bhavish Aggarwal recently stated that Ola Electric is not actively pursuing the development of electric cars at the moment. Instead, the company is concentrating on a new framework aimed at profitability. The strategy revolves around three main pillars: expanding production capacity, vertically integrating the supply chain, and producing battery cells domestically.
Aggarwal emphasized that the company’s current priority is to make products that are relevant to the Indian market. According to him, two-wheelers and three-wheelers are the primary focus, as these are the vehicles most in demand by Indian consumers.
Electric Car Plans on Hold
Ola Electric had ambitious plans to enter the electric car market, but those plans have now been postponed. Speaking to PTI-Bhasha, Aggarwal explained that the entire focus of the company is on becoming profitable before venturing into new product categories like electric cars. He pointed out that profitability is crucial for the company’s growth and sustainability.
On August 15, Ola Electric launched a new series of electric motorcycles, the Roadster series, with prices starting at ₹75,000 (ex-showroom). This move aligns with the company’s strategy to cater to the existing demand for two-wheelers in India, rather than expanding into the electric car segment right now.
Ola Electric’s Path to Profitability
Aggarwal outlined the company’s strategy for improving profitability, which includes making rapid investments in key areas. He explained that profitability will be measured from income before tax to income after tax, and that the company has two or three key strategies in place to achieve this goal in the coming quarters.
One of the central components of Ola Electric’s profitability framework is the production of battery cells. Aggarwal highlighted that the company’s focus on producing its own battery cells will play a significant role in boosting profits. He noted that as these ‘Bharat 4680’ cells start being used in Ola’s products, profitability is expected to increase substantially by early next year.
Ola Electric has announced plans to integrate these battery cells into its vehicles from the first quarter of the fiscal year 2025-26. However, Aggarwal also mentioned that the company has not set a specific deadline for becoming profitable, indicating a cautious approach to financial planning.
Ola’s Financial Performance and Future Outlook
Despite its ambitious plans, Ola Electric is currently facing financial challenges. The company reported a consolidated loss of ₹347 crore in the April-June quarter of this year, up from ₹267 crore in the same period last year. For the entire financial year 2023-24, the company’s net loss amounted to ₹1,586 crore.
These financial losses have raised concerns, especially as the company’s share price has doubled from its listed price of ₹76. Investors and stakeholders are closely watching how Ola Electric plans to turn its financial situation around.
