Ola Electric's Loss Grows in Q1; E-Motorcycle Launch Announced for August

Ola Electric Mobility reported a consolidated loss of Rs 347 crore for the April-June quarter of 2024-25, up from Rs 267 crore in the same period last year. Revenue from operations rose to Rs 1,644 crore, compared to Rs 1,243 crore in the previous fiscal's corresponding quarter. Total expenses increased to Rs 1,849 crore from Rs 1,461 crore in the June quarter of FY24.

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The company made its market debut earlier this month. Ola shares closed higher by 2.38 per cent at Rs 110.64 on BSE on Wednesday. The company stated that its automotive segment E2W showed a significant improvement in EBITDA margin and is nearing EBITDA breakeven. The automotive segment EBITDA margin for the quarter was negative 1.97 per cent, improving from negative 8.29 per cent in the same quarter of FY24.

Focus on Motorcycle Segment

Chairman and CEO Bhavish Aggarwal highlighted that Ola Electric is now concentrating on the motorcycle segment, which constitutes about two-thirds of the industry's overall volumes. He announced that the company will unveil its electric motorcycle portfolio across mass and premium segments during its annual flagship event on August 15, 2024.

Aggarwal also mentioned that despite the reduction in FAME subsidy quarter-on-quarter, the auto segment revenue is almost at the cusp of becoming EBITDA positive. He noted that the June quarter saw the highest-ever vehicle deliveries by the company at 1,25,198 units, compared to 70,575 units delivered in the same period last year.

Market Share and Product Demand

Ola Electric's market share during the quarter reached a record 49 per cent. The company ramped up deliveries of its mass-market scooter under Rs 1-lakh portfolio S1 X during the quarter, which helped accelerate growth. The existing product portfolio also experienced strong demand, maintaining growth momentum throughout the quarter.

The benefits of scale are further amplified by Ola's scalable platform-based product development and manufacturing technology, resulting in high degrees of commonality across its products. The company announced plans to integrate its cells into its vehicles by the first quarter of next fiscal year.

Manufacturing and Cost Optimisation

Aggarwal stated that mass-market products are increasing penetration for both the company and the industry. During the first quarter, mass-market scooter volume stood at 50,000 units while premium segment scooters reached 75,000 units. In July, E2 wheeler penetration was at 7.5 per cent while scooter penetration rose to 21 per cent.

He added that there is increased penetration even in Tier-II and Tier-III markets with mass segment scooters launched during the June quarter. According to Ola, increasing scale of operations has benefited the company through lower manufacturing costs and supply chain optimisation.

Aggarwal revealed that Ola will launch a portfolio of motorcycles across markets and segments by the end of this financial year. He noted that manufacturing capacity is flexible across scooters and motorbikes, eliminating the need for large capital expenditure to scale motorbikes into existing capacity.

The CEO also mentioned that gross margin improvements are expected over the next quarters, with a significant step being achieved when Ola starts producing its own cells. Production has already begun for these cells.

Aggarwal explained that cells account for 30-35 per cent of total costs and are crucial to Ola Electric's strategy to reduce costs and increase EV penetration in India. As local cell production ramps up, savings of up to 20 per cent on cell costs could be realised over time.

The company has already manufactured around 30,000 cells since the beginning of this quarter and is ramping up production. These cells have been fully tested and will be integrated into vehicles by the first quarter of next financial year.