Ola Electric Q1 Results Show Widening Losses and 50% Revenue Drop

We begin with the headline numbers: Ola Electric reported a ₹428 crore net loss in Q1 FY26, up 23% from last year’s ₹347 crore . Revenue also took a major hit, sliding nearly 50% to ₹828 crore, down from ₹1,644 crore in the same quarter last year.

Despite these challenges, we see a bright spot. The company narrowed its loss from ₹870 crore in the previous quarter, and its automotive unit posted positive EBITDA in June, a key step toward profitability.

We’lanalyzees what these figures show and explain their impact. We will look at how Ola is cutting costs, driving cash flow improvements, and shifting strategy from rapid growth to financial stability. We’ll also outline the clear risks ahead and explain why the next few quarters could be a turning point for this electric vehicle maker.

Financial Snapshot: Q1 FY26

• Revenue: ₹828 crore, down ~49.6% YoY.
• The net loss climbed to ₹428 crore, reflecting a 23% year-on-year increase.
• Quarter-on-Quarter (QoQ): Loss sharply reduced from ₹870 crore in Q4 .

Operational Metrics & Cost Efficiency

We track vehicle deliveries at 68,192 units in Q1, down sharply from 125,000 units last year. On costs:

• Project Lakshya brought down monthly auto operating expenses from ₹178 crore to ₹105 crore.
• The company’s total monthly operating expenses stand at around ₹150 crore, with a target of reducing them to ₹130 crore by FY26.

EBITDA results:

• EBITDA loss amounted to ₹237 crore, with a margin decline of 28.6%.
• The auto segment moved from –90.6% in Q4 to –11.6% in Q1, and even showed a positive result in June.

Cash Flow & Liquidity Position

We’re seeing clearer signs of healthy finances:

• Free Cash Flow (FCF) improved from ₹455 crore in Q4 to ₹107 crore in Q1, reflecting stronger management of the company’s finances.
• Auto segment cash flow nearly reached breakeven in Q1 .

This reflects better capital use and working capital control.

Strategic Shift: From Growth to Profitability

We note a strategic turn:

1. Project Lakshya sharply cut costs.
2. Strong vertical integration lowered hardware costs and improved margins .
3. Focus on MoveOS+ software, capturing 50% adoption, up from 2% last quarter, boosting margins.

Product & Supply Chain Developments

We highlight the shift to Gen‑3 scooters, which now make up ~80% of sales. Battery-cell development is advancing too:

• Production of the in-house 4680 Bharat Cell is scheduled to begin around Navratri.
• Plans to reach 1.4 GWh capacity this year, expanding to 5 GWh next.
• Also notable is the rare-earth-free motor tech rollout in Q3 to reduce supply chain risk.

Market Dynamics & Competitive Pressures

Ola’s market share declined from nearly 50% to about 20%, while competitors such as TVS, Bajaj, and Ather continued to grow their presence. The company attributed the drop in volumes to tough competition and reduced government subsidies.

FY26 Outlook & Performance Guidance

Ola projects:

• 325,000–375,000 vehicle deliveries in FY26 .
•  The company aims to generate revenue between ₹4,200 crore and ₹4,700 crore (₹42–47 billion).
• Gross margin expected to rise to 35–40% by FY26, thanks to PLI incentives.
• The auto segment is projected to remain EBITDA-positive starting from the second quarter.

Risks & Headwinds

Risks remain:

• Balancing cost cuts vs. volume recovery is delicate.
• Scaling battery and motor technology is operationally complex.
• Regulatory concerns near showrooms in Maharashtra need watching.
• Customer complaints on quality or service performance may affect brand trust.

Conclusion

We conclude: Ola Electric faces a major crossroads. Q1 shows steep losses and volume decline. But we’re seeing improved margins, cost discipline, and better cash flows. The next two quarters are critical. If the cost cuts hold, margins expand, and deliveries recover, Ola could turn a profit by late FY26. That would mark a key shift from high-growth mode to steady and sustainable performance.

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Disclaimer:

This content is for informational purposes only and not financial advice. Always conduct your research.