Ola Electric Auto Business Turns Profitable in Q2 FY26, Posts 30.7% Gross Margin

Just last week, the company received ARAI certification for its indigenously developed 4680 "Bharat Cell" batteries.

Ola Electric Mobility has announced a significant financial milestone, reporting profitability in its auto business for the first time in Q2 FY26. The company achieved a positive EBITDA of 0.3 percent, marking a sharp turnaround from a negative 5.3 percent in Q1 FY26. The company says this performance was underpinned by robust operational discipline, strong product demand, and improved cost management. Gross margin expanded to 30.7 percent.

The company’s consolidated revenue from operations stood at ₹690 crore for the quarter, with total deliveries of 52,666 vehicles. Ola Electric’s performance signals a major inflection point in its journey toward long-term profitability and sustainable growth in India’s rapidly evolving electric mobility sector.

Strong Margin Expansion and Cost Efficiency

Ola Electric’s integrated business model spans from in-house cell manufacturing to end-product delivery. The company’s auto operating expenses were reduced to ₹258 crore from ₹308 crore, representing a 52 percent decline compared to Q3 FY25. Consolidated operating expenses also fell to ₹416 crore from ₹451 crore, amid ongoing cost-optimisation initiatives.

While reported cash flow from operations stood at -₹40 crore, this was attributed to a one-time festive inventory build-up worth ₹55 crore. Adjusting for this, the company’s auto business became cash-generative with ₹15 crore in positive cash flow. Ola expects auto operating expenses to decline further to around ₹225 crore by Q1 FY27, aided by technology-driven efficiencies and process consolidation.

Product Innovation and Market Growth

The Gen 3 platform continued to deliver robust unit economics and customer traction. Ola's latest model, the Roadster electric motorcycle, experienced a fourfold increase in sales compared to Q1, achieving peak daily sales of 450 units during the festive season. The model now represents approximately 15 percent of total sales.

In a key technological milestone, Ola Electric developed India’s first government-certified ferrite motor in October 2025, eliminating dependency on rare earth imports while offering equivalent performance at reduced costs. The company also announced ongoing development of in-house ADAS and ABS platforms, which are expected to debut with MoveOS 6 in early FY27.

HyperService: Enhancing Customer Experience

Ola Electric expanded its customer-centric initiatives with the launch of HyperService, an after-sales platform designed to enhance service accessibility and revenue generation. The initiative integrates third-party garages and independent mechanics into Ola’s ecosystem, providing customers with tiered service options and direct access to genuine parts.

Currently, parts revenue contributes around 2 percent of the company’s total revenue, compared to an industry average of 10–15 percent. Ola aims to leverage this untapped opportunity, as the HyperService platform offers gross margins exceeding 50 percent, combining affordability for customers with improved profitability for the company.

Cell Manufacturing and Energy Storage Expansion

Q2 FY26 marked a breakthrough in Ola Electric’s cell manufacturing business, with its Gigafactory achieving 2.5 GWh of installed capacity, making it India’s first operational gigawatt-scale facility. The company plans to expand capacity to 5.9 GWh by March 2026, and to 20 GWh by FY27. Ola has also begun producing its proprietary Bharat 4680 cells, which are being integrated across its automotive lineup.

In October 2025, Ola launched Ola शक्त (Shakti), India’s first residential Battery Energy Storage System (BESS) built on Bharat 4680 cells. Designed for home and solar integration, the system offers 2X life and 5 – 10 hours of power backup, with expected revenues of ₹100 crore in Q4 FY26 and ₹1,000–1,200 crore annually in FY27.

Ola Electric Future

For H2 FY26, Ola Electric targets deliveries of around 100,000 automobile units, maintaining a focus on sustainable margins amid competitive market conditions. The company projects FY26 consolidated revenue of ₹3,000–3,200 crore, with the auto segment expected to close Q4 with gross margins near 40 percent and EBITDA around 5 percent.