Ola Electric Faces Significant Revenue Decline of 43 Percent in Q2, Despite Narrowing Losses
- ByStartupStory | November 6, 2025
Ola Electric Mobility Ltd reported a steep 43 percent drop in revenue for the second quarter of fiscal 2026 (Q2 FY26), with total revenue from operations falling to ₹690 crore from ₹1,214 crore in the same period last year. This sharp decline highlights weakening sales momentum amid intensifying competition in the rapidly evolving electric two-wheeler market.
Despite the revenue contraction, Ola Electric managed to narrow its consolidated net loss to ₹418 crore during Q2 FY26, improving from a loss of ₹495 crore in the corresponding quarter of the previous year. The company attributed this improvement primarily to stringent cost control measures and higher operational efficiency.
Operating EBITDA loss also improved substantially, dropping to ₹203 crore compared to ₹379 crore a year ago. Ola Electric’s management outlined that the core automotive segment achieved positive cash flow from operations during the quarter, a sign of progress towards sustainable business operations.
The company recorded sales of roughly 16,034 electric scooters in October 2025—a significant 61 percent drop from 41,843 units sold in October 2024. This decline in volume reflects challenges in maintaining market share amid fierce competition from legacy players like Bajaj Auto and TVS Motor, which have emerged as tough rivals in the electric two-wheeler segment.
Ola Electric’s founder and CEO, Bhavish Aggarwal, signaled a strategic shift during the earnings call held in July to prioritize profitability and operational stability over aggressive market expansion. The revised outlook for fiscal 2026 projects consolidated revenue between ₹3,000 crore and ₹3,200 crore, down from earlier guidance of ₹4,200 crore to ₹4,700 crore—a reflection of the tempered sales expectations.
The company plans to deliver approximately 100,000 units in the second half of FY26, focusing on improved margins and cost discipline. Employee expenses declined significantly, falling to ₹55 crore from ₹139 crore year-over-year, and material costs were cut nearly in half to ₹514 crore, contributing to the enhanced cost structure.
Despite near-term challenges, Ola Electric is actively pursuing opportunities to strengthen its manufacturing capabilities and operational efficiency. It is focusing on vertical integration efforts, including boosting battery cell production and enhancing supply chain resilience.
Market analysts note that Ola Electric’s recent performance underscores the growing pains typical of fast-scaling startups transitioning from hypergrowth to profitability. The company’s ability to successfully navigate competition, manage costs, and sustain consumer demand will be critical to its future trajectory.
In conclusion, Ola Electric’s Q2 FY26 results show clear signs of improvement in cost management and loss reduction but underline the severe revenue pressures and volume declines the company faces in a competitive landscape. The firm’s pivot towards profitability and operational discipline coupled with focused production targets sets the stage for potential recovery and sustainable growth in India’s booming electric vehicle market.
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