New Delhi: Ola Electric is betting that a leaner operating model, deeper vertical integration and in-house battery manufacturing will carry it through a choppy phase for India’s electric two-wheeler market and put it on a clearer path to profitability.
For the quarter ended December 2025, the company reported consolidated revenue from operations of ₹470 crore and deliveries of 32,680 electric two-wheelers. The headline, however, was profitability at the gross level: consolidated gross margin expanded to 34.3%, up 15.7 percentage points year-on-year and 3.4 points sequentially—its highest yet and among the best in the segment, according to the company.
Management described Q3 FY26 as a “structural reset” quarter. Over the past few months, Ola Electric has pruned its retail footprint, tightened service execution and reworked its cost structure. Quarterly operating expenses, which had peaked at around ₹840 crore in Q4 FY25, were brought down to ₹484 crore in Q3 FY26. The roadmap now targets ₹250–300 crore of quarterly opex over the next couple of quarters, which would lower EBITDA breakeven to roughly 15,000 units a month.
That matters because the company says its current manufacturing footprint can support 3–4 times the present volumes with minimal incremental fixed costs—setting up operating leverage once demand picks up.
The margin expansion was underpinned by the company’s Gen 3 platform economics and a vertically integrated manufacturing model. A key milestone during the quarter was the achievement of Production Linked Incentive (PLI) certification for the entire Gen 3 portfolio, which Ola Electric sees as a structural margin lever tied to localisation and manufacturing efficiency.
From 18.6% in Q3 FY25 to 30.9% in Q2 FY26 and now 34.3%, the steady climb in gross margins signals that the company’s cost of goods sold is coming down even as pricing in the mass EV scooter segment remains competitive.
Ola Electric has also been under pressure to fix service bottlenecks. Through its “Hyperservice” programme—covering parts availability, technician hiring and training, tighter service governance and AI-led automation—the company says it has cut service backlogs by about half. Around 80% of service requests are now completed the same day, compared with a peak backlog of about two weeks earlier.
For a brand that scaled rapidly and then faced customer complaints around service turnaround times, these metrics are crucial to restoring confidence and supporting repeat purchases as the market matures.
Perhaps the most strategic lever is the company’s battery play. During the quarter, Ola Electric doubled cell production quarter-on-quarter to 72,418 cells and began the first commercial deployment of its in-house 4680 “Bharat Cells” into customer vehicles. It also launched “Ola Shakti”, a residential battery energy storage system (BESS) product powered directly by Gigafactory output.
The Gigafactory is currently operating at about 2.5 GWh of installed capacity, with plans to scale this to 6 GWh by March 2026. Ola Electric says it is the only Indian company to have operationalised a scaled cell Gigafactory, positioning it to benefit not just from EV demand but also from the broader energy storage market—spanning solar-plus-storage, grid-scale deployments and data centre energy needs.
Balancing growth with discipline: The quarter’s numbers reflect a company prioritising fundamentals over breakneck expansion. Slower EV penetration growth across the industry has forced a rethink on costs and execution.
Ola Electric’s response has been to reset its operating model, focus on service reliability and push harder on in-house technology to defend margins.
The company argues that, with margins now structurally higher and breakeven volumes materially lower, it is better placed to ride the next upcycle. If demand recovers to levels that allow utilisation of its existing capacity, the operating leverage could be significant.
For investors, the near-term questions will revolve around sustaining these margins in a competitive market, keeping service metrics on track and executing the Gigafactory scale-up without cost overruns.
But Q3 FY26 marks a clear pivot: from a growth-at-all-costs phase to one that puts profitability, execution and integration at the centre of the strategy.