Ola Electric, India’s ambitious electric two-wheeler pioneer, is navigating a turbulent stretch in 2025. From dramatic stock fluctuations and investor exits to policy headwinds and production-linked incentives, the Bhavish Aggarwal-led company is facing a complex mix of challenges and opportunities. As the EV market evolves rapidly, Ola Electric’s journey reflects both the promise and pressure of leading India’s green mobility revolution.
Stock Swings And Investor Moves
Ola Electric’s stock (OLAE.NS) has been on a volatile trajectory. After rallying nearly 73 percent from its July lows, the stock took a sharp hit in early September, dropping 6 to 8 percent in two consecutive sessions.
• On September 5, shares fell to Rs 60.34 from Rs 64.50, triggered by SoftBank’s stake reduction
• SoftBank’s investment arm SVF II Ostrich sold 94.9 million shares between July 15 and September 2, cutting its stake from 17.83 percent to 15.68 percent
• The sell-off dampened investor sentiment, despite broader market optimism driven by GST rate cuts
This move by SoftBank, one of Ola’s early backers, has raised questions about long-term confidence in the company’s profitability roadmap.
GST Cut Sparks Sector-Wide Concerns
Adding to the pressure, the Indian government announced a reduction in GST on internal combustion engine (ICE) two-wheelers up to 350cc—from 28 percent to 18 percent. While this aims to boost traditional vehicle sales, it has cast a shadow over electric two-wheeler demand.
1. Ola Electric shares plunged nearly 8 percent following the announcement
2. Analysts believe the move could temporarily shift consumer interest away from EVs
3. Over 58 crore shares changed hands on the NSE, reflecting high trading activity
Despite this, experts suggest the long-term EV outlook remains positive, especially with supportive policies like the Production Linked Incentive (PLI) scheme.
PLI Certification Offers A Silver Lining
One of the most promising developments for Ola Electric is its recent approval under the Ministry of Heavy Industries’ PLI scheme. The Automotive Research Association of India (ARAI) granted certification for Ola’s Gen 3 S1 scooter lineup, making it eligible for incentives of 13 to 18 percent of sales value until 2028.
• All seven Gen 3 models are covered under the certification
• These models account for more than half of Ola’s current sales volume
• Management expects improved cost efficiency and margin expansion from Q2 FY26
This milestone could be a game-changer, helping Ola move closer to EBITDA positivity and offsetting recent financial strain.
Financial Snapshot And Operational Challenges
Ola Electric’s financials remain under scrutiny. The company posted a net loss of Rs 428 crore in Q1 FY26, with revenue dropping 50 percent year-on-year to Rs 828 crore. However, gross margins improved to 25.6 percent, aided by cost support from the PLI scheme.
• Shareholders approved reallocation of IPO funds and extended deployment timelines
• Ola is accelerating work on rare-earth-free motors to address supply chain risks
• Layoffs and cost-cutting measures have been implemented to streamline operations
Despite the losses, the company’s strategic pivots suggest a focus on long-term sustainability.
New Models And Market Expansion
Ola Electric is betting big on product innovation. Upcoming launches include the S1 Pro Sport, S1 Pro+ 5.2 kWh, and Roadster X+ 9.1 kWh, expected to roll out later this year and into 2026.
• These models aim to capture diverse consumer segments and expand Ola’s market share
• The company showcased its ‘India Inside’ vision at Sankalp 2025, reinforcing its commitment to domestic manufacturing
With both Gen 2 and Gen 3 scooters now PLI-certified, Ola is positioning itself as a dominant force in India’s EV landscape.
Conclusion: A Company At The Crossroads
Ola Electric’s current phase is a blend of growing pains and strategic recalibration. While investor exits and policy shifts have rattled the stock, the company’s PLI certification, product pipeline, and margin improvements offer hope. As India’s EV ecosystem matures, Ola’s ability to adapt, innovate, and deliver profitability will determine whether it remains a frontrunner or fades into the crowd.
Sources: The Week, MSN India, Ola Electric Investor Relations, Financial Express, News18
