Why Ola Electric share price is rising, will it continue in 2025 ?

After Ola released its Q1 FY26 performance report, the company’s share price jumped more than 17% in a single day. That’s not just noise it’s a sign of a possible turnaround. But is it real and lasting? Let’s dig in.

From Speed to Sustainability: A Shift in Strategy

For the past few years, Ola’s goal was simple: sell as many scooters as possible. That’s typical startup behaviour chase growth first, profits later. But now, Ola is shifting gears. The focus is clearly on making the business profitable, and for the first time, it’s starting to show.

In June 2025, Ola’s core auto business the one that sells electric two-wheelers became profitable at the operating level. That means Ola started earning more than it spent to run that part of the company.

And how did they get there?

A cost-cutting program called “Lakshya” helped slash monthly expenses from ₹178 crore to ₹105 crore a 41% drop. At the same time, the new Gen 3 scooters, which now make up 80% of deliveries, brought in better margins and fewer warranty issues.

Building Their Own Batteries

Another reason Ola’s future looks interesting is batteries specifically, 4680 lithium-ion cells. These are high-performance batteries Ola now makes in-house. Starting this Navratri, they’ll be used in its scooters. The goal is simple: reduce costs, reduce dependence on suppliers, and take full control of production.

Ola also began monetizing software through a product called MoveOS+ a bundle of premium features for scooter owners. Just three months ago, only 2% of customers opted for it. Today, more than 50% are paying for it. This shift opens up a new, high-margin revenue stream something Indian EV makers haven’t done before.

The Numbers That Got Everyone Talking

Ola’s Q1 FY26 numbers tell a very different story from the past:

·        Sales increased 35.5% from the previous quarter

·        Operating losses dropped by nearly 66%

·        Net loss was cut in half

·        Total expenses fell 18.5%

·        The company has a healthy ₹3,197 crore in cash reserves

Looking ahead, Ola expects to sell between 3.25–3.75 lakh vehicles and earn between ₹4,200–₹4,700 crore in revenue this year. If all goes to plan, its auto business will be fully profitable from Q2 FY26.

But Not Everything Is on Cruise Control

Ola’s in-house battery division while promising is still burning money. In Q1 FY26 alone, it lost ₹43 crore and used up ₹91 crore in free cash flow. Scaling up this part of the business is expensive and tricky, and any delays or failures could drag down Ola’s overall performance.

MoveOS+ may be popular now, but will Indian consumers continue to pay for software features? This model is new to the two-wheeler market, and future demand is still uncertain.

Commodity price spikes especially for lithium and nickel could also push up costs, even with in-house battery production. And let’s not forget past product issues. Ola had to spend ₹250 crore on warranty provisions for its earlier models. If something similar happens again, it could hurt both its brand and bottom line.

Lastly, Ola is putting a lot of hope into India’s festive season (Navratri and Diwali) to meet its full-year targets. If demand falls short, the numbers won’t look as pretty next quarter.

When Can We Expect Full Profitability?

·        Auto business EBITDA (operating profit) is expected to turn fully positive in Q2 FY26

·        Company-wide profit (including battery division) is unlikely before FY27 or FY28, given ongoing investments and losses in the battery segment

Final Thoughts

Ola Electric is clearly shifting from growth-at-any-cost to building a sustainable, tech-driven business. It’s cutting expenses, making its own batteries, and unlocking new revenue from software. The numbers show progress, and the strategy is bold.

But risks remain battery scale-up, government incentives, and consumer adoption of paid features could all impact the road ahead. The auto business may turn profitable soon, but full company-wide profitability is still a few years away.

Disclaimer: This content is for educational purposes only; please conduct your own research and consult with a qualified investment advisor before making any investment decisions.

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