Ola Electric is reportedly gearing up for a major restructuring initiative that could impact more than 500 employees, or roughly 12% of its current workforce, which stands at around 4,000. This strategic restructuring is aimed at optimizing costs, streamlining operations, and ultimately improving the company’s long-term profitability. The move is in line with the company’s broader goal of maintaining its competitive edge in the electric vehicle (EV) market. The restructuring process, which is said to have commenced months ago, is expected to conclude by December 2024, and it follows similar efforts by Ola Electric in 2022 in preparation for its highly anticipated initial public offering (IPO).
A source close to the matter informed Business Standard that this exercise is focused on enhancing operational efficiency and aligning Ola Electric’s internal processes with its financial objectives. The restructuring follows a period of expansion and product development as the company aims to solidify its position as a leader in India’s growing EV sector. Ola Electric’s previous cost-cutting measures were also part of its strategic plan ahead of its IPO, and this current restructuring move is likely seen as an effort to ensure that the company remains well-positioned for sustained growth and profitability in the years to come.
Ola Electric’s IPO, which launched on August 2, 2024, and closed for subscriptions on August 6, marked a significant milestone for the electric vehicle manufacturer. Shares of the company debuted on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on August 9, 2024, signaling a new chapter in the company’s history. This public listing marked the culmination of Ola Electric’s journey from a startup to a major player in the Indian EV market.
In its first set of post-IPO financial results, covering the second quarter of FY25, Ola Electric posted an impressive 38.5% year-on-year growth in revenue, which totaled Rs 1,240 crore. The revenue surge was largely driven by a 73.6% increase in vehicle deliveries, with the company delivering a total of 98,619 units in Q2 FY25, up from 56,813 units in the same period the previous year. While these numbers reflect strong growth, the ongoing restructuring process underscores the company's focus on ensuring long-term financial sustainability and operational efficiency.
Ola Electric’s retail operations have been notably successful, with its network of 782 company-owned stores exceeding industry norms by delivering an average of 130 sales per quarter. The company's ability to outperform industry averages by 2-3 times underscores the strong demand for its electric scooters. In line with its expansion strategy, Ola Electric plans to grow its retail footprint significantly, aiming to establish 2,000 stores by March 2025. This expansion will not only include retail outlets but will also integrate service infrastructure, creating a comprehensive experience for customers.
The company has diversified its product portfolio to include six electric scooter models, with prices ranging from Rs 75,000 to Rs 1,50,000. This wide range allows Ola Electric to cater to various segments of the market, from budget-conscious customers to those looking for premium offerings. Additionally, Ola Electric is expanding beyond electric scooters into two-wheelers and three-wheelers, with plans to launch 20 new products over the next two years. This aggressive product rollout includes plans for at least one new product launch every quarter, signaling the company’s intent to maintain momentum in the highly competitive EV market.
Further bolstering its growth prospects, Ola Electric is adopting a vertical integration strategy, including the in-house manufacturing of battery cells at its Gigafactory. This move is expected to reduce the company’s reliance on external suppliers and provide greater control over its supply chain. Ola Electric’s goal is to integrate these in-house manufactured cells into its two-wheeler models by Q1 FY26. During Q2 FY25, Ola Electric achieved a significant milestone when it produced over 20,000 battery cells as part of its trial production phase, signaling that the Gigafactory’s production systems are now fully operational.
Despite the restructuring, Ola Electric's shares were trading 1.25% higher at Rs 68.08 on the Bombay Stock Exchange at the time of the report. This positive movement in share price reflects investor confidence in the company’s growth trajectory, despite the ongoing adjustments within its operations.
The restructuring effort, combined with the company’s impressive revenue growth, ambitious expansion plans, and technological advancements in EV manufacturing, highlights Ola Electric’s commitment to its long-term goals. While the company navigates the current restructuring process, its success in aligning operational efficiency with its profitability targets will be crucial to maintaining momentum in the highly competitive EV sector. The company's ability to continue innovating, expanding its product line, and growing its retail network will likely be key factors in sustaining investor confidence and ensuring Ola Electric’s place as a dominant player in the future of mobility in India and beyond.
