For Ola Electric, the third quarter of FY26 was revealing of a transition at play. On Friday, the electric two-wheeler giant reported a stark 55% year-on-year drop in revenue to ₹470 crore, a figure that would ordinarily send panic through investors.
Yet, the narrative from Bengaluru was not one of defeat, but of a deliberate, painful “structural reset.” While the top line crumbled under the weight of plummeting sales volumes, the company managed to narrow its net loss to ₹487 crore from ₹564 crore a year prior. This is perhaps a signal that Founder and CEO Bhavish Aggarwal is finally pulling the emergency brake on cash burn in favor of sustainable economics.
The slowdown is undeniable. Deliveries nosedived to 32,680 units in the December quarter, a steep 61% fall from the roughly 84,000 units sold in the same period last year. For a company that once commanded a 50% market share and defined the aggressive growth trajectory of India’s EV revolution, this contraction is significant. It reflects a quarter where Ola Electric effectively stopped chasing customers and sought to fix its own house first. The company has faced a turbulent year marked by a deluge of service complaints, regulatory scrutiny, and a visibly frustrated customer base. In response, the leadership made a conscious choice: halt the relentless pursuit of volume and fix the bleeding service infrastructure.
“Q3 FY26 marks a structural reset for Ola Electric,” Aggarwal stated, framing the contraction as a strategic pause. The company has moved to realign its retail footprint, slashing its store count from a sprawling 4,000 touchpoints down to approximately 700. This drastic consolidation is part of a broader target to cut operating costs by 50% in the coming quarters.
The goal is clear: lower the breakeven point. By reducing fixed overheads, Ola Electric claims it has brought its EBITDA breakeven requirement down to just 15,000 units per month. In theory, this means the company can become profitable even as a smaller player, without needing to dominate the market with massive volumes immediately.
Despite the gloom in sales figures, there were glimmers of operational efficiency. Gross margins expanded to a healthy 34.3%, a figure the company touts as industry-leading. This improvement is largely attributed to the “Gen 3” platform and the vertical integration of its manufacturing capabilities, including the nascent Gigafactory operations. The strategy is to control the technology stack, right from battery cells to software, to squeeze out better unit economics than competitors like TVS and Bajaj, who rely more on traditional supply chains.
However, the competitive landscape has shifted ruthlessly during Ola’s “reset.” While Ola retreated to fix its service backlogs (which it claims have now halved, with 80% of requests completed on the same day) legacy players have encroached on its territory. TVS Motor Company and Bajaj Auto have steadily eaten into the market, capitalizing on the trust deficit Ola suffered in 2025.
The challenge for Aggarwal is no longer just about making EVs mainstream; it is about winning back the trust of the Indian consumer who now has viable, reliable alternatives.
The path forward hinges on the success of this austerity drive. Management has guided that operating expenses will trend between ₹250 crore and ₹300 crore in the next few quarters. If they can hold this line while slowly ramping volumes back up, the “reset” might prove to be a masterstroke of discipline. But if demand does not return, Ola Electric risks becoming a leaner, more efficient company with too few customers to sustain it. As the Gigafactory scales toward commercial deployment, the next two quarters will determine whether this was a strategic pit stop or a permanent deceleration.
