Ola Electric says demand outstrips supply, targets 25,000 vehicles in December

Ola Electric Mobility said demand for its electric two-wheelers is now outstripping supply, with constraints in its supplier network limiting production even as the company looks to ramp up output to around 25,000 vehicles in December.

In its Q2 FY27 investor presentation released on November 12, the company said production had remained broadly flat for several months but was now increasing month on month. It added that its manufacturing plant had the capacity to produce significantly more vehicles than current output, making the supply chain ramp-up rather than manufacturing capacity the primary constraint.

The company said it could sell every vehicle it produces and was working closely with supplier partners to scale their capacity. It also disclosed that around 5,000 vehicles with paid orders in September faced delivery delays of about a week due to charger unavailability, pushing deliveries into October.


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The supply constraints come as Ola Electric transitions from its direct-to-consumer (D2C) model to a dealer-led distribution network. The company said it had appointed 255 dealer partners operating 319 stores as of November 8, with plans to expand the network to around 450 stores by December and 700 by March 2027.

Ola Electric said wholesale orders and dealer dispatches had increased, with repeat orders accounting for a rising share. It added that dealer channel inventory stood at around 15 days, while several stores that opened earlier had less than a week's inventory.

The company stopped taking orders through its D2C stores from November 1, with most of these outlets expected to close by December. It expects the transition to the dealer model to reduce operating expenses further by around Rs 50 crore.

Q2 financial performance

Despite the improvement in dealer momentum, Ola Electric continued to report losses in the September quarter.

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The company's consolidated revenue from operations stood at Rs 421 crore in Q2 FY27, down from Rs 455 crore in the preceding quarter. Its consolidated net loss widened to Rs 362 crore from Rs 336 crore in Q1 FY27.

Operating EBITDA loss increased to Rs 218 crore from Rs 165 crore in the previous quarter, while adjusted operating EBITDA loss stood at Rs 246 crore, compared with Rs 195 crore in Q1.

Gross margin remained relatively stable at 29.93% against 30.5% in the previous quarter, despite higher commodity costs. Operating expenses rose to Rs 369 crore from Rs 333 crore in Q1, although the company said the figure would decline as it completes the transition to the dealer network.

Auto debt falls, company expects free cash flow

Ola Electric said it had significantly reduced its borrowings, with total debt declining to Rs 1,819 crore in September 2026 from Rs 3,132 crore in December 2024.

Borrowings in its automotive business fell sharply to Rs 337 crore from Rs 2,422 crore over the same period.

The company said the lower automotive debt, stable gross margins and improved working capital cycle under the dealer-led model would support its expectation of generating free cash flow from the Auto business in the near term.

It added that gross margins could moderate slightly in Q3 and Q4 FY27 due to the dealer rollout, but operating margins were expected to improve meaningfully.

Gigafactory ramp-up and cell economics

Alongside its automotive business, Ola Electric is looking to scale its cell manufacturing operations. The company said it had achieved the scheduled commercial operation date (SCOD) for 6 GWh of cell capacity ahead of schedule and was now ramping up production and yields.

It expects to integrate its own LFP cells into vehicles from Q4 FY27. The company said its NMC cell yields currently stood at 70-75% and were expected to reach 80-85% by the end of Q3 FY27 and around 90% in Q4.

For LFP cells, production is being ramped up this quarter, with yields expected to reach around 70% by the end of Q4 FY27 and 90% in Q1 FY28.

Ola Electric said its own cells would break even against externally purchased cells at a yield of around 70%. At an 85% yield, it expects to achieve savings of around 10-15% compared with buying cells externally.

The company said its automotive business would consume around 2-3 GWh of cells in FY28, while capacity beyond this requirement would be directed towards its Shakti energy storage business. Shakti Gen 2 is expected to launch in Q4 FY27.