Ola Electric Reports Widened Losses and Halved Revenue for Q1 2025

Ola Electric reported a net loss of $102 million in Q1, a widening from $3.47 billion in the same period last year. Revenue halved to $102 million, and the company expects FY26 revenue to be between $1.2 billion and $1.3 billion, with vehicle sales expected to drop to between 325,000 and 375,000 units. Ola Electric is in talks to refinance its debt and has reasonable inventory levels of rare-earth magnets, with in-house solutions like rare-earth-free motors to be introduced next quarter.

Ola Electric reported a net loss of $102 million in the first quarter of FY26, a widening from the $3.47 billion loss reported in the same period last year. The company's operating revenue plunged nearly 50% year-on-year to $102 million, reflecting intense competition in the electric two-wheeler segment. Total expenses dropped 42% to $1,065 million during the quarter under review, primarily due to a 66% decline in the cost of raw materials consumed [1].

The company has shifted gears from aggressive expansion to a more measured, profit-focused strategy, focusing on consolidating operations, improving margins, and laying the groundwork for future expansion. Ola Electric expects to sell between 325,000 and 375,000 vehicles in FY26, with projected revenue of $1.2 billion to $1.3 billion [2].

Despite the financial setbacks, Ola Electric's stock zoomed as much as 9% after the announcement of the quarterly results, trading 0.7% higher at $40.10 as of 10:30 a.m. [3]. The company is in talks to refinance its debt and has reasonable inventory levels of rare-earth magnets. It plans to introduce vehicles equipped with in-house cells during the current quarter and deploy rare-earth-free motors in the third quarter [4].

The rare earth magnet shortage, stemming from China's export restrictions, has forced competitors like Bajaj Auto, Ather Energy, and TVS Motor to slash production. Ola Electric, however, remains unaffected, leveraging ample magnet stocks to maintain production and gaining a competitive edge in the Indian EV market [5].

References:
- [1] https://m.economictimes.com/tech/startups/ola-electric-q1-resultss-net-loss-widens-in-june-quarter/articleshow/122429304.cms
- [2] https://www.goodreturns.in/news/ola-electric-stock-zooms-9-after-ola-electric-q1-result-net-loss-at-rs-427-crore-revenue-increase-1442413.html
- [3] https://www.investing.com/news/stock-market-news/ola-electric-rises-43-as-company-forecasts-improved-margins-93CH-4132951
- [4] https://www.angelone.in/news/rare-earth-magnet-shortage-impacts-bajaj-ather-tvs-production-output-while-ola-electric-leads
- [5] https://www.financialexpress.com/auto/electric-vehicles/rare-earth-magnet-shortage-from-china-bajaj-ather-and-tvs-slashing-ev-output/3905951/