Ola Electric announced a structural reset in Q3 FY26, marked by a record consolidated gross margin of 34.3%. The company is focusing on fundamentals, leading to a structurally lower volume breakeven business. Key operational highlights include the final phase completion of the Gigafactory by March 2026 and the introduction of 4680 Bharat Cells into commercial products. Operating expenses have been significantly reduced, setting the stage for improved operating leverage as volumes recover.
Q3 FY26: A Period of Structural Reset
Q3 FY26 signifies a structural reset for Ola Electric, focusing on strengthening foundations rather than short-term volume optimization. The company realigned its retail footprint, cost structure, and operating model, resulting in a business with a structurally lower volume breakeven and significantly improved operating leverage. Key Headline KPIs for the quarter included ₹470 Cr in Consolidated Revenue, 32,680 E2W Deliveries, and 72,418 Cells Produced.
Financial Performance and Margin Expansion
The structural advantages, driven by vertical integration and Gen3 economics, are evident in the financial results. Ola Electric achieved a record consolidated gross margin of 34.3% in Q3 FY26, expanding 15.7 pp YoY. The company forecasts GMs to be in the 35-40% range in FY27.
The consolidated Adjusted Operating EBITDA Margin stood at -68.7% for the quarter. However, the strategic operational improvements have significantly lowered fixed costs. Quarterly operating expenses (including leases) dropped sharply from a peak of ₹844 Cr in Q4 FY25 to ₹484 Cr in Q3 FY26. The company expects this opex to stabilize at ₹250–300 crore over the next couple of quarters, reducing the EBITDA breakeven point to 15,000 units per month.
Built on Deep Structural Advantage
Ola Electric has invested approximately ~₹5,300 crore across manufacturing, battery innovation, and R&D platforms, creating a structural advantage through full vertical integration and a proprietary technology stack. This investment is now yielding results in performance and cost:
- Range Superiority: The portfolio now powers India’s longest-range Electric 2-Wheelers, with the Roadster X+ achieving 501 km range (powered by 9.1 kWh).
- Product Roadmap: Future products will be built on the mature Gen3 architecture, with launches sequenced after business stabilization.
Service Stabilization and Trust Recovery
The company acknowledges service execution gaps impacted brand trust. The ‘Hyperservice’ initiative has structurally improved operations by enhancing parts availability, technician training, and AI-led automation. This has resulted in reducing service backlogs by nearly half (from 14 days to 7–8 days currently), with ~80% of tickets now completed on the same day.
Product perception remains strong, with 90+% overall ownership satisfaction. Warranty provisions for FY26 are expected to be 2–3% of revenue, among the lowest in the Indian EV industry, reinforcing product robustness.
Gigafactory Milestone: Commercial Scale Integration
The Gigafactory ramp is on track, marking a transition to commercial scale integration in Q3 FY26.
- Cell Production Doubled: Cell production doubled sequentially from Q2 to 72,418 cells.
- 4680 Bharat Cells: The first commercial deployment of in-house 4680 Bharat cells occurred in vehicles delivered to customers, including the launch of Ola Shakti.
- Capacity Scale: The facility is scaling to 6 GWh by March 2026.
Ola Electric claims to be the only Indian E2W player to transition to 4680 cells, leapfrogging competitors and positioning itself for future energy storage opportunities.
Closing Outlook
With the heavy build phase behind them, Ola Electric is now focused on disciplined execution, scaling capacity, and leveraging the embedded operating leverage. Incremental sales recovery is expected to translate directly into improved profitability and cash discipline as service metrics stabilize and structural opex reductions take full effect.
Source: BSE
