Ola Electric is currently experiencing its most challenging time in its seven-year history. Even the biggest fan of the Indian EV manufacturer is beginning to realise how steep the uphill journey is, so that isn’t hyperbole.
Ola Electric’s revenue fell 62% year over year to INR 611 Cr in Q4, a 42% quarter-on-quarter (QoQ) fall, as a result of its recent battle with regulators and other government bodies and claims of sales inflation.
Bhavish Aggarwal is once again under pressure as a result of this lacklustre performance. Q4 was described as a “complex quarter” by Aggarwal on a post-earnings call. However, he claimed that the “confusion” around the February sales figures was now behind them, in addition to the regulatory concerns.
Nevertheless, it is reasonable to wonder if Aggarwal’s grandiose ambitions for Ola Electric’s next growth phase are lacking any essential components.
Overhanging Regulations on Ola Electric
After overhauling the registration procedure and distribution network over the last six months, the company may have overcome some regulatory obstacles, but given its history, experts say things may not be that simple moving forward.
In a recent social media post, Saharsh Damani, CEO of the Federation of Automobile Dealers Associations (FADA), said that Ola Electric, which was formerly praised as a disruptor, is currently facing a lot of criticism. “Sustainability is not assured by disruption alone. “Stakeholder trust, culture, and governance” are more important than hype,” he stated.
Speaking to Inc42, Damani stated that because established companies like TVS Motor, Bajaj Auto, Hero Motocorp, and Honda were not present in the market, Ola Electric could initially overtake them as the market leader in the EV two-wheeler sector. “The future appears uncertain as these players are preparing to increase their sales and Ola Electric is already feeling pressure from all sides,” he said.
Significantly, Ather reported operational revenue of INR 676 Cr in Q4, surpassing the company’s revenue.
“Ola Electric’s auditors have already expressed doubts about the company’s ability to continue as a going concern in the days ahead. The recent suicide death of a worker at Bhavish’s other company, Krutrim AI, has exacerbated the problem for Ola in addition to the already-existing lack of trust, according to Damani.
Damani, meantime, believes that the biggest concern facing EV OEMs at the moment is the total lack of vehicle subsidies in the near future. The major test in the days ahead will be whether Ola Electric and all other electric two-wheeler companies can withstand this change, which is anticipated to occur in a year or two.
A Wave Of Unfavourable Investor Attitude
Even though brokerages gave Ola Electric a BUY recommendation following the Q4 results, it is significant that institutional investors have frequently sold off their shares of the firm in the midst of its difficulties. Due to the over 50% decline in Ola Electric’s stock since December, retail investors have suffered over the past six months.
As a result of this prolonged drop in share price, the company’s founder and CEO, Aggarwal, reportedly paid about INR 20 Cr ($2.3 Mn) in cash to fill up collateral for borrowings against shares.
Every quarter, mutual funds have also been reducing their investments in Ola Electric. Despite an increase in their broader market investments, their share dropped from 4.1% in the previous December quarter (Q3) to 2.6% in Q4. Although the number of stakeholders increased from eight to eighteen, their overall interest in the company decreased.
Hyundai Motor Company left Ola Electric after selling off all of its shares, or 10.8 Cr, or 2.47% of the company, in June, adding to the selling tendencies. This coincided with Kia Corporation selling 2.7 Cr shares, or 0.62% of the firm, in a mass transaction.
According to Prashanth Tapse of Mehta Equities, institutional investors are now seeking to place wagers on Ather Energy and may change their approach to investing in this market. Given Ather Energy’s greater product quality and stronger management, he now gives the company more weight than Ola Electric, even for retail investors looking to invest in the two-wheeler EV industry.
Since present shareholders are optimistic about cell manufacturing projections and penetration in the motorcycle market, he thinks Ola Electric’s shares will stay in the current range for the next one to two quarters and may not see a significant decline.
The Roadster debut, which has been postponed for several months, will be crucial. To find out how much Ola Electric can rely on this market, we will be delving into the Indian electric motorcycle market. Look out for that on Inc42 soon.
The Things Ola Electric’s Turnaround Plans Are Missing
Investor mood is obvious after the significant setbacks the EV behemoth has experienced in recent months: demonstrate outcomes with statistics rather than rhetoric. Additionally, a crucial component of its turnaround narrative includes maths and figures.
In February 2025, Ola Electric estimated that in order to reach EBITDA breakeven, it would need to sell 50,000 scooters a month. Citing cost-cutting measures, the company cut the quantity in half to 25,000 units during the Q4 investor meeting three months later. For many stockholders, however, the issue has been perplexing and has raised more concerns about the company’s projection strategy.
Based only on the performance of its Gen 3 platform and PLI benefits, CEO Aggarwal has provided incredibly ambitious projections for Q1 FY26, despite the fact that its Q4 FY25 gross margin dropped to 19.2% from above 20% in the previous three quarters.
By delivering roughly 65,000 EVs in Q1, the company hopes to achieve a gross margin of roughly 28%–30% on revenue of roughly INR 800 Cr–850 Cr.
The logic and procedures used to arrive at these figures are still mostly unknown. Even though all of these are doable, analysts don’t think Ola Electric can easily improve the reputation it has in the market because of the poor quality of its technology and goods.
Leaders in the industry are now worried about potential future problems in this part of Ola Electric’s EV stack as cell manufacturing becomes a primary focus.
Additionally, Mukherji stated that consumers continue to have concerns regarding the company’s primary product attributes and post-purchase support.
Any technology can have issues, and the automobile sector has seen several recalls, but OEMs have taken the appropriate steps. Ola Electric should now be more open after experiencing such serious problems. It should openly admit its errors and promise consumers that it will fix the main issues before introducing new items or technologies. The shareholders, directors, and leadership must now reflect,” he continued.
Ola Electric’s chance to profit from its initial hypergrowth is closing as the competition becomes more formidable. Companies like Bajaj, TVS, and Hero MotoCorp are increasing their investments in EVs and possess the production capacity to surpass Ola Electric.
Will Bhavish Aggarwal be able to change his plan of action in time?