Since the start of the ongoing financial year in April 2025, founder Bhavish Aggarwal and the maker of S1 Pro have changed their stance on the capacity of the company’s gigafactory, the number of sales it needs each month to break even, revenue guidance, and the strength of its distribution network.
The inconsistent outlook and forecasts coincide with plunging sales of its electric scooters, highlighting its inability to shake off concerns that began with concerns about the quality of after-sales services. That has eroded investor trust, wiping out more than half of the company’s market value in the past year.
While it is fine to adapt strategies to changing business environments and competitive moves, statements which are not backed by business logic can be construed as misleading investors, said Shriram Subramanian, founder at Ingovern Research Services, a proxy advisory firm. “Listed companies should not make very sweeping statements without planning granularly.”
Ola Electric did not respond to queries emailed on Monday.
Gigafactory flip-flops
Among the series of flip-flops over the last seven months, the contrasting commentary on the expansion of the gigafactory stands out.
On 14 July last year, after the earnings for the first quarter ended June, Aggarwal-led Ola Electric said in a letter to shareholders that “given that the EV market has evolved slower in recent quarters, we don’t foresee the need to expand beyond 5GWh (capacity) till FY29.” The company originally planned to reach 20GWh.
Based on this, the company reallocated ₹1,227 crore from the proceeds of its initial public offering to expand beyond 5GWh to other purposes such as R&D and regular corporate expenses.
The outlook changed after Q2 earnings were announced in November. Citing the launch of its Ola Shakti battery energy storage system (BESS) based on lithium-ion cells, the company noted that it would need 20GWh of capacity.
“To meet this demand, we are planning to expand our total cell-manufacturing capacity to 20 GWh by the second half of FY27,” its letter on 6 November said. Aggarwal and the company did not clarify how funds would be allocated to expand beyond 20GWh.
Ola Electric once again changed its stance in the latest earnings call held on 13 February. The company said that the gigafactory will complete 6GWh of capacity by March 2026.
“For our business priorities, we don’t expect any more gigafactory expansion as far as the current roadmap goes,” Aggarwal said, responding to a question on the future expansion. “This would be enough to cater to both the automotive as well as the BESS needs.”
Where did the stores go?
The company has also been inconsistent about how it wants to use its distribution network, even as sales of its scooters declined.
Ola Electric announced in December 2024 that its outlet count had more than quadrupled from 800 to over 4,000 stores as it faced a growing pile of complaints about after-sales services.
But during the earnings call in November last year, Aggarwal told analysts and investors that the large distribution network would be an advantage for its battery storage business.
“The product goes into the market around mid-January and goes into the market across all our 2,500-3,000 stores. So, in that sense, we have a very strong distribution also,” he said.
However, in the latest 13 February shareholder letter, the company said that it has reduced the number of stores from 4,000 to 700 as part of its cost restructuring programme.
The company’s operating expenses declined from ₹844 crore as of the March 2025 quarter to ₹484 crore in October-December, according to its filings. Its losses narrowed to ₹487 crore from ₹564 crore a year earlier, while revenue plunged 57% to ₹504 crore as its sales dwindled.
Shifting sales outlook
Ola Electric’s estimates for the scooter business have also been shifting since the start of last year. In the February 2025 earnings call for the third quarter of FY25, Aggarwal informed shareholders that the company needs to sell 50,000 vehicles every month to break even.
That number changed in the May 2025 earnings call for Q4FY25 to 25,000 a month, citing the company’s cost cuts. But on February 13, Aggarwal further lowered this threshold to 15,000 sales a month.
All this while, Ola Electric’s sales tumbled. In calendar year 2025, the company slipped to fourth place on India’s EV leaderboard, behind TVS Motor Co., Bajaj Auto Ltd and Ather Energy Ltd. Last year, Ola Electric’s sales stood at nearly 200,000 units, falling by more than half since 2024.
Sales recovery at Ola Electric could be a difficult, long-drawn process, especially amid greater focus from incumbents and scale-up at rival Ather, analysts at Emkay Global Financial Services wrote in a 14 February note.
“The turnaround would necessitate Ola to have a strong cash balance to survive this phase,” analysts Chirag Jain, Nandan Pradhan, Marazbaan Dastur and Mohit Ranga of Emkay wrote in the note. However, citing the brokerage’s calculations, they said Ola had a net debt of ₹670 crore as of December compared with net cash of ₹160 crore as of September.
“Upside risk could stem from a strategic stake sale in the battery business, resulting in meaningful cash infusion,” they said.
The analysts’ interest in the company is also cooling.
Since listing in August 2024, the company’s calls have typically lasted about an hour, with veteran analysts from top brokerages asking questions. However, fewer than five analysts posed questions to Ola Electric’s management during the 6 February call, which lasted just over half an hour. More than a third of the time was taken by the company for its own commentary.
The buy-sell ratio on the stock only reinforces concerns. After listing in August 2024, 2 analysts had a ‘buy’ call on the stock against no ‘sell’ recommendation, according to Bloomberg data. By January 2025, the ratio had moved to 5:2 as more brokerages began covering the stock. However, as of 17 February 2026, the ratio reversed, with six analysts having a ‘sell’ rating on Ola Electric against 1 ‘buy’ call.
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