Bhavish Aggarwal’s flip-flops raise questions about Ola Electric’s future
Since the start of the ongoing fiscal year in April 2025, founder Bhavish Aggarwal and the maker of the S1 Pro have changed stances on the capacity of the company’s gigafactory, the number of sales it needs every month to break even, revenue guidance and the strength of its distribution network.
The inconsistent outlook and forecasts coincide with the decline in electric scooter sales and show that it has not been able to allay concerns that began with concerns about the quality of after-sales services. This eroded investor confidence and caused more than half of the company’s market value to be wiped out last year.
Shriram Subramanian, founder of Ingovern Research Services, a proxy advisory firm, said adapting strategies to changing business environments and competitive moves is a good thing, but statements not supported by business logic can be interpreted as misleading investors. “Companies on the list should not make comprehensive statements without detailed planning.”
Ola Electric did not respond to emailed questions on Monday.
Gigafactory flip-flops
Among the setbacks of the last seven months, contrasting comments on gigafactory expansion stand out.
On July 14 last year, after earnings for the first quarter ended June, Aggarwal-led Ola Electric said in a letter to shareholders: “Given that the EV market has evolved at a slower pace in recent quarters, we do not foresee the need to expand beyond 5 GWh (capacity) by FY29.” The company initially planned to reach 20 GWh.
Based on this the company reallocated ₹1,227 crore from the proceeds from its initial public offering to go beyond 5GWh towards other purposes like R&D and regular corporate expenses.
The outlook changed following the release of second-quarter earnings in November. Referring to the launch of the Ola Shakti battery energy storage system (BESS) based on lithium ion cells, the company noted that it will require a capacity of 20 GWh.
“To meet this demand, we plan to increase our total cell production capacity to 20 GWh by the second half of FY27,” the letter dated Nov. 6 said. Aggarwal and the company did not disclose how the funds would be allocated to go beyond 20 GWh.
Ola Electric changed its stance once again in its last earnings call on February 13. The company said the gigafactory will complete 6 GWh of capacity by March 2026.
Responding to a question about future expansion, Aggarwal said, “In terms of our business priorities, we do not expect any further massive factory expansion as per the current roadmap.” “This will be sufficient to meet the needs of both automotive and BESS.”
Where did the stores go?
The company has also been inconsistent about how it wants to use its distribution network, even as scooter sales have fallen.
Ola Electric announced in December 2024 that its number of outlets has more than quadrupled from 800 to over 4,000 as it faces increasing complaints regarding after-sales services.
But during the earnings call in November last year, Aggarwal told analysts and investors that the wide distribution network would be an advantage for the battery storage business.
“The product is released in mid-January and is available in all our 2,500-3,000 stores. Therefore, we have a very strong distribution in this sense,” he said.
However, in its latest shareholder letter dated February 13, the company announced that it was reducing the number of stores from 4,000 to 700 as part of a cost restructuring program.
The company’s operating expenses decreased ₹844 crore as of March 2025 quarter ₹484 crore in October-December, according to their application. Losses narrowed ₹487 crore ₹While it had revenue of ₹ 564 crore a year ago, revenue fell 57% ₹504 crore while its sales are decreasing.
Change in sales view
Ola Electric’s forecasts for its scooter business have also been changing since the beginning of last year. In its February 25 earnings report for the third quarter of FY2025, Aggarwal informed shareholders that the company needed to sell 50,000 vehicles every month to break even.
That figure was changed to 25,000 per month for the fourth quarter of QFY25 on the May 2025 earnings call, citing the company’s cost cuts. However, on February 13, Aggarwal reduced this threshold to 15,000 sales per month.
While all this was happening, Ola Electric’s sales plummeted. The company fell to fourth place in India’s electric vehicle rankings in calendar year 2025, behind TVS Motor Co., Bajaj Auto Ltd and Ather Energy Ltd. Last year, Ola Electric’s sales fell by more than half since 2024 to around 200,000 units.
Analysts at Emkay Global Financial Services wrote in a Feb. 14 note that a sales recovery at Ola Electric could be a difficult and protracted process, especially at a time of greater focus from incumbents and growth at rival Ather.
“The turnaround will require Ola to have a strong cash balance to survive at this stage,” analysts Chirag Jain, Nandan Pradhan, Marazbaan Dastur and Mohit Ranga of Emkay said in a note. he wrote. However, they said based on the brokerage firm’s calculations, Ola has net debt. ₹670 crore as of December compared to net cash ₹160 crore as of September.
“Upside risk could arise from a strategic stake sale in the battery business, which could result in meaningful cash flow,” they said.
Analysts’ interest in the company is also decreasing.
Since its IPO in August 2024, the company’s calls have typically lasted about an hour, with experienced analysts from top brokerage firms fielding questions. But during the February 6 call, which lasted just over half an hour, less than five analysts posed questions to Ola Electric management. More than a third of the time was used by the company for its own reviews.
The buying-selling ratio in the stock strengthens the concerns. After its IPO in August 2024, 2 analysts issued a “buy” call for the stock, although there was no “sell” recommendation. Bloomberg data. By January 2025, the ratio had increased to 5:2 as more brokerages began covering the stock. However, as of February 17, 2026, the ratio reversed and six analysts gave Ola Electric a “sell” rating against 1 “buy” call.
