Ola Electric CEO Bhavish Aggarwal outlined his vision to drive the company towards profitability by focusing on cost-cutting measures.
In an interview with CNBC-TV18, Aggarwal detailed key strategies for Ola Electric’s future, emphasizing scaling and cost management.
He highlighted that as production volume increases, revenue growth will outpace the rise in fixed costs, leading to an eventual breakeven in the company’s EBITDA margin. However, he did not specify the exact timeline for this milestone.
Cost-Saving Measures
One major cost-saving strategy involves producing cells in-house. Aggarwal noted that the cost of cells accounts for 30-35% of the total cost of an electric vehicle.
By manufacturing these cells internally, Ola Electric aims to cut out the 25-30% margin charged by external suppliers for lithium cells.
“We aim to start commercial production of cells next year,” he stated, adding that this move will also address concerns about excess capacity in the lithium supply chain.
Market Trends and Government Support
Aggarwal observed a significant rise in the penetration of electric scooters, growing from 2% to 15% in the past two and a half years, and estimated that this could reach 40-50% in the next 4-5 years.
Ola Electric currently holds a 46% market share in electric two-wheelers and plans to launch electric motorbikes later this year.
Regarding government support, Aggarwal mentioned that the industry is becoming less dependent on subsidies.
The FAME subsidy has decreased from ₹60,000 to ₹10,000 per vehicle and is expected to continue for a few more years to support EV adoption.
Revenue Projections
While Aggarwal did not provide specific sales guidance for FY25, he used the ₹5,000 crore revenue from FY24 as a benchmark.
He advised stakeholders to refer to the company’s Q1 earnings report, set to be released on August 9, for more detailed information.
