Contract Renegotiations To Impact Feb EV Registrations: Ola Electric

About two weeks after its weak Q3 FY25 show, Ola Electric said it expects its EV registrations for the month of February to have a “temporary impact”. 

In an exchange filing, the EV maker said that its registrations on VAHAN will be “temporarily impacted” due to it renegotiating terms of agreements with its agencies Rosmerta Digital Services Pvt Ltd and Shimnit India Pvt Ltd. 

While Rosmerta Digital Services offers digital services and distribution for vehicle registrations, last-mile delivery, among others, to original equipment manufacturers (OEMs), Shimnit manufactures high-security registration plates for vehicles plying on the Indian roads. 

The Bhavish Aggarwal-led EV maker had signed contracts with both the service providers in December 2021. For both the contracts, Ola Electric is currently renegotiating the existing agreement to “reduce costs and improve the efficiency of the registration process”.

“Our sales continue to be strong through February 2025 and the dip in registration will be streamlined in the next few weeks,” Ola Electric said. 

The company’s claims are in contrast to brokerage Jefferies latest report on the Indian EV market. In its report, the brokerage firm said it expects Ola Electric to continue to remain under pressure moving forward as its deep-pocketed competitors TVS and Bajaj Auto remain on the prowl.

Jefferies said that Ola Electric is losing market share in the electric two-wheelers market. The company’s market share declined to 17% in the first half of February from 49% in the June quarter of 2024.

Meanwhile, Bajaj and TVS lead among incumbents with 22-26% market share in January-February, it added.However, it is not clear if Ola Electric’s registrations were impacted in the first half of February as well.

Earlier today, the company’s shares hit a new low at INR 58.50 during the intraday trading. It is pertinent to mention that the company’s share prices have fallen about 14% since its financial disclosures for the quarter ended December 31, 2024.

In the quarter, the EV maker saw a near 15% decline in its EV sales to 84,029 from 98,619 units sold in the previous quarter. This also marked a 3% year-on-year (YoY) decline from 86,775 Ola escooters sold in the same quarter previous year. 

On the back of the decline in sales, the company’s net loss widened 50% YoY and 14% sequentially to INR 376 Cr in the quarter. Revenue from operations also dipped 19% to INR 1,045 Cr during the quarter under review from INR 1,296 Cr in Q3 FY24. Sequentially, it fell 14% from INR 1,214 Cr. 

Besides the decline in sales, the past quarter saw Ola Electric land into regulatory troubles due to complaints about its after sales processes. In October, the Central Consumer Protection Authority (CCPA) launched a detailed investigation into numerous consumer complaints filed against electric vehicle manufacturer Ola Electric. It further sought additional information from the company in December.

In a separate filing today, Ola Electric said that it has provided the requested information and clarifications.

The company reclaimed some of the lost share in the EV two-wheeler market in January 2025. Ola Electric’s registrations for the month jumped 64% to 22,656 units from 13,794 units in December 2024. 

In its Q3 earnings call, CEO Aggarwal asserted confidence about the company’s sales moving forth. While acknowledging the significant dip in the company’s sales volume in the quarter, he said that the company is expecting to touch about 50,000 monthly sales in the  coming few quarters. This, he said, will help Ola Electric achieve EBITDA auto segment EBITDA breakeven.

“We can expect auto segment EBITDA breakeven at about 50,000 monthly sales. Now when we get there, it depends on market conditions as well as EV penetration. But we do feel in the next few quarters, we can get to about 50,000 monthly sales, which takes us to an auto segment EBITDA positive,” he said during the analyst call. 

Shares of Ola Electric were trading 0.28% higher from the previous close at INR 60.51 on the BSE at 3:25 PM.