Ola Electric’s gross margins surged in January, with more gains ahead: Bhavish Aggarwal

Ola Electric’s Bhavish Aggarwal stressed on the rise in third quarter gross margin percentage while abating investor concerns regarding its widening losses and decline in revenue for the period. 

The EV-maker posted an automotive gross margin of 20.8% in the three months ended December 31, which is 20 basis points higher than the previous quarter. Gross margins represent the percentage of revenue a company retains after accounting for the direct costs of producing its goods or services.

During the post-earnings investor call, Aggarwal added that January 2025 saw a significant margin expansion, and this trend is expected to continue into the fourth quarter and beyond. 

“We can expect auto segment EBITDA breakeven at about 50,000 monthly sales. Now when we get there, it depends on market conditions as well as the penetration. But we do feel in the next few quarters we can get to about 50,000 monthly sales,” Aggarwal said, noting that this was provided gross margins remain at levels seen in January.

For context, the company sold 22,656 units in January. However, amidst the upcoming festive season towards the end of this quarter and the beginning of the next, the sales are bound to pick up as the company gears up to launch its motorcycles, according to Aggarwal.

While Aggarwal did not give any numbers for the demand observed for its motorcycle’s preorders, he added that the company saw a “very strong response to our launches.”

At a consolidated level, the introduction of in-house battery cells is further expected to improve margins, lowering the break-even sales requirement. 

Additionally, the company is ramping up its product portfolio with the introduction of electric three-wheelers in the second half of 2025. 

Aggarwal also addressed the cost optimisation efforts the company took during the period, which included letting go between 15%-17% of the company’s workforce. Cost savings from these layoffs were offset by investments in the company’s network expansion. 

Ola Electric opened 3,200 new stores and service centres across the country in an effort to maximise its presence and drive sales. Aggarwal added that it will take around two to three months for these stores to begin showing results, but these centres are already seeing rising store walk-ins. 

The market leader in electric two-wheelers on Friday reported widening losses in the three months ended December 31, bogged down by lower sales of its two-wheelers during the period. It reported a quarterly net loss of Rs 562 crore in FY25 compared to Rs 374 crore in the previous year. 

Additionally, the company reported a 19.4% decline in revenue from operations in the third quarter to Rs 1,045 crore.

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)