Ola Electric sees auto profitability at monthly sales of 25,000 units, likely in Q2FY26

Electric two-wheeler major Ola Electric Ltd, which was earlier expecting its automotive segment to break even at average monthly sales of 50,000 units, is now projecting EBITDA breakeven for the business at the monthly sales of approximately 25,000 units.

“And as a result of cost savings, as well as our network project Vistaar, the break-even point of our auto business segment, EBITDA, has now come down to almost 25,000 units from earlier what we had communicated,” Ola Electric founder, Chairman and MD Bhavish Aggarwal told investors.

Ola Electric operates its businesses under two segments—auto and cell. Earlier, Aggarwal had told investors that the auto segment EBITDA will achieve breakeven at 50,000 units monthly sales level. 

According to Aggarwal, the automaker is on track to hit 25,000 unit sales in either June or July. Furthermore, the company anticipates its automotive business will achieve EBITDA breakeven during the second quarter of the current financial year. 

Ola Electric's average monthly sales volume had averaged close to 30,000 units in FY25. However, the EBITDA margin during the year came in at negative 23.8%. 

Aggarwal noted that when the company sold over 300,000 units last year, its cost structure, encompassing both gross margin and operating expenses, was higher.

He highlighted that Project Lakshya, launched last November, is already yielding results. The company has aimed for an operating cost structure of Rs 110 crore for the auto segment. While costs stood at Rs 175 crore in Q3 FY25, they have since dropped to Rs 121 crore as of April 2025, and is confident of hitting Rs 110 crore target by June.

This forecast comes after Ola Electric projected first-quarter sales volume at 65,000 units, which translates to a monthly average of close to 22,000 units.

Ola Electric’s gross margin during the fourth quarter of FY25 at 19.2%, and the metric is estimated to improve further to 28-30% in the first quarter of FY26. EBITDA margin in the fourth quarter was at negative 78.6%, and in the first quarter it is seen at negative 10%.

“In Q1, it [gross margin] is likely to be about 28-30%. And in Q2, once the PLI benefits come in, we will add another 5-7 points to the margin. So all that accounted for brings the EBITDA break-even point closer,” Aggarwal said.

“That said, we have also reduced our operating expenses. So it is a twin impact of significant gross margin improvement as well as operating cost reduction, which we call it, project luxury.”

To bolster its market presence and optimize operations, Ola Electric highlighted progress on two strategic initiatives: Project Vistaar, which aims to significantly expand its retail and service network, and Project Lakshya, a comprehensive cost reduction drive. 

"We've grown to approximately 3,200 company-owned stores and a total of 4,000 points of sale," Aggarwal explained. "Our next critical step is to boost the sales productivity of each store.

Meanwhile, the company has started the deliveries of its first electric motorcycle – Roadster. The model which comes at a price range of Rs 99,999-1.29 lakh, is expected to bring in additional volumes in the coming months.

“With R&D for the Roadster platform complete, we will continue to focus on advancing the platform through generational upgrades, aligned with our broader strategy of vertical integration and technology-led innovation,” Aggarwal said.

“Upcoming products like the Sportster and Arrowhead will be built on this platform, leveraging shared architecture to accelerate development and unlock scale benefits.”

India’s largest two-wheeler maker Hero MotoCorp recently said the company is looking at breakeven for its electric vehicle business in a couple of years with an average monthly sale of 25-30,000-unit level. Its monthly average EV sales under the Vida brand in FY25 was around 4,800 units.

Bajaj Auto on the other hand has said that its electric vehicle business, including two-wheelers and three-wheelers, became profitable at an EBITDA level during the second half of last financial year. The company’s monthly retails were in the range of 19,000 to 35,000 units over the last three months.