Ola Electric, a homegrown electric two-wheeler manufacturer, must consistently sell 50,000 units each month to achieve profitability, according to founder and CEO Bhavish Aggarwal. During an analyst call following the company’s earnings report for the December quarter, Aggarwal noted that Ola Electric sold 25,000 units in January, claiming this helped the company regain its market leadership in terms of volume.
Aggarwal stated, “To break even in terms of EBITDA from our auto sales, we are targeting monthly sales of 50,000 units. We are diversifying our portfolio by offering two generations of our EV scooters to enhance both margin and volume. We also anticipate that our battery cell manufacturing division will contribute positively to our operating margin, and we expect growth in our motorbike category sales throughout this calendar year. Overall, we believe these strategies will help us expand our gross margin and maintain our market leadership despite the current competitive landscape.”
He also addressed the increased expenditures that led to higher sequential losses in the December quarter, attributing them to investments in service centers and dealership experiences, as well as a one-time warranty scheme aimed at building customer goodwill. Ola Electric has faced significant criticism over customer complaints regarding service center experiences, with reports indicating a backlog of 80,000 complaints per month as of September.
On the stock market, Ola Electric’s shares fell approximately 2% to ₹70 each, remaining 8% above their all-time low. The company has been under pressure due to ongoing service center challenges while trying to expand its market presence. Ola Electric went public in August last year at an issue price of ₹76, subsequently rising to a peak of ₹157.53 within a month, but has since seen a decline.
Aggarwal, who began his entrepreneurial journey with the ride-hailing app Ola Cabs over a decade ago, launched Ola Electric in 2017. According to the Society of Manufacturers of Electric Vehicles (SMEV), Ola Electric sold 34,161 scooters in April last year, while competitors TVS, Ather, and Bajaj sold 7,762, 4,142, and 7,559 units, respectively. However, by October, Ola’s sales had slowed, with the company selling 24,958 scooters during that period.
