Blogs Vikalp Saini November 8, 2025 0 Comments

Beyond the Scooter: Ola Electric Achieves Auto EBITDA Profitability and Launches ‘Shakti’ Energy Business

Ola Electric just released its Q2 FY26 shareholder letter, and the document reveals a company in the midst of a significant transformation. The biggest headline is a landmark achievement: the core Automotive business has turned EBITDA positive for the first time ever.

This signals a strategic pivot from a high-growth, cash-burning startup to a business focused on sustainable profitability. But that’s only half the story. The company is simultaneously activating its next major growth engine: a full-scale entry into the energy storage market with “Ola Shakti”.

Here’s a breakdown of this pivotal quarter and what it means for the company’s future.

The Profitability Milestone: How the Auto Business Got in the Black

In a challenging market, Ola’s Auto business achieved a positive EBITDA margin of 0.3%.

This wasn’t achieved through just sales, but through aggressive financial discipline. Here’s how they did it:

Massive Margin Expansion: Auto Gross Margin expanded by 510 bps quarter-over-quarter to hit 30.7%. The company notes this is “higher than most ICE 2W companies”.
Aggressive Cost Control: The company executed a 52% reduction in operating expenses compared to Q3 FY25. Sequentially, Auto opex was cut from 308 cr to 258 cr.
Cash-Generative Core: The Auto business is now cash-generative. While reported cash flow from operations was -40 cr, this included a one-time 55 cr build-up for festive inventory. Adjusting for this, the underlying cash flow was a positive 15 cr.

This focus on fundamentals is particularly noteworthy as the overall E2W industry has seen slowing growth and competitors are relying on heavy discounting to gain market share. Ola states it has taken the “opposite approach” to focus on cost structure and margin expansion.

🔋 The Next Growth Engine: Ola Shakti and the Gigafactory

The most exciting development is the formal launch of Ola’s energy business, “Ola Shakti”. This division leverages the company’s massive investment in its Gigafactory, which is now operational.

Gigafactory is Live: The Ola Gigafactory has commissioned 2.5 GWh of capacity and is on track to hit 5.9 GWh by March 2026. It is now in a “steady production ramp” as India’s first giga-scale cell plant.
Enter Ola Shakti: In October 2025, the company launched its first energy product: a residential Battery Energy Storage System (BESS) using its in-house 4680 cells. This product targets the rapidly growing rooftop solar market and provides a better alternative to traditional inverters.
Ambitious Projections: Ola is not thinking small. It expects the Shakti business to generate 100 cr in revenue in Q4 FY26 (its first quarter) and scale to ₹1,000-₹1,200 crore in annual revenue in FY27.
Grid-Scale Expansion: The next step is containerised BESS products for commercial and utility-scale use, with a launch planned for Q1 FY26. To meet this demand, Ola plans to expand its total cell manufacturing capacity to 20 GWh by the second half of FY27.

This move diversifies Ola’s revenue away from just vehicles and positions it as a key player in India’s energy transition.

Ola Electric Download

Building a Deeper Ecosystem: HyperService and R&D

Alongside the two major business lines, Ola is strengthening its ecosystem to improve customer experience and unlock new revenue.

HyperService Launch: The company launched “HyperService,” a new model that opens up access to genuine parts for customers and third-party garages. This aims to lower warranty costs and improve service reach.
A High-Margin Opportunity: The parts business is a high-margin (50%+) opportunity. Today, parts account for just 2.5% of Ola’s revenue, compared to an industry average of 10-15%. This is a clear and simple avenue for growth.
R&D Milestones: Ola continues to innovate, achieving certification for India’s first ferrite motor, which eliminates dependency on imported rare-earth minerals. An in-house ADAS platform (bringing car-like safety features to scooters) is planned for early FY27.