In today’s Finshots, we talk about Ola Electric’s stock price surge and the factors behind what looks like a comeback.

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Now, on to today’s story.

The Story

When you think of Ola Electric, it almost feels like a bit of a problem child. The startup hasn’t really had a smooth run for most part of the time since its listing.

Sure, right after its IPO, things looked great. It held a 30–35% share of the electric two-wheeler market and seemed firmly in control.

But then 2025 happened, and things started to slip. Service centres got overwhelmed, backlogs piled up to nearly 20,000 bikes, and customers grew frustrated with delays. This led to regulatory scrutiny and bad press coverage.

And the numbers soon reflected this. In Q3 FY26 (Oct–Dec 2025), deliveries fell to 32,680 units, compared to 84,000 units in the same period last year. Revenue dropped to ₹470 crore, nearly half of what it was a year ago. Losses narrowed slightly, but not enough to move the needle. Meanwhile, the stock hit all-time lows in February 2026, losing about a quarter of its value.

Its market share told an even harsher story. From a dominant position, it fell to under 6% just a month ago, pushing Ola down to fifth place behind TVS Motor, Bajaj Auto, Ather Energy, and Hero MotoCorp. This made analysts, including Goldman Sachs, cut their targets, calling this a “prolonged turnaround”. And the company admitting that it needed a “structural reset” was kind of the final nail in the coffin.

By early 2026, things looked quite grim. Ola had guided for over 3.25 lakh units in sales for FY26, but managed only about 1.5 lakh units in the first nine months. Revenue was expected to cross ₹4,200 crore, but was less than half of that. Even the revised targets it announced at the beginning of FY26, started to look out of reach.

Profitability wasn’t helping either. Gross margins or the share of revenue left after subtracting production costs, were expected to cross 35%, but stood at around 29%. EBITDA margins, which reflect operating profitability, were supposed to turn positive at 5%, but instead sat at -6% for the nine months ended FY26.

Put it all together, and you’ll see that this wasn’t just one or two bad quarters. Ola’s entire story seemed to have gone off track.

And yet, fast forward to now, things seem to be changing.

Sales in March jumped to 10,117 units, up a whopping 150% from February. Daily orders crossed 1,000 in the last week of the month, showing that demand is picking up again. And most importantly, the stock has started moving up sharply after the announcement of its in-house LFP (Lithium Iron Phosphate) battery.

So, what’s changed, you ask?

Well, it looks like Ola is finally hitting the right notes to fix what was broken.

For starters, it doubled down on its “Hyperservice” push, which is a same-day servicing model it had introduced in early 2025. To clear backlogs and handle rising demand, Ola upgraded its existing service centres into hyperservice centres. At the same time, it tightened parts availability and improved diagnostics. The end result was that more than 80% of vehicles can now be serviced on the same day. And for the ones that can’t, customers are offered a loaner or backup scooter. All of this has started to bring down turnaround times and, more importantly, improve the overall customer experience — something that was clearly missing not too long ago.

The next thing is cost control. At its peak, Ola’s consolidated quarterly operating expenses had ballooned to ₹840 crore in Q4 FY25. But in the latest reported quarter, Q3 FY26, that number has nearly halved to ₹484 crore. And this didn’t happen by chance. The company rationalised its stores, trimmed its workforce by about 5%, and tightened spending across the board. And it believes that its operating expenses could settle at a steady ₹250–300 crore over the next few quarters.

You can already see the impact. Gross margins in Q3 FY26 improved to 34.3%, compared to 25.8% and 30.9% in the previous two quarters. In simple terms, Ola is now keeping a larger share of what it earns.

And then there’s the latest cost cutting move that got everyone’s attention — its new indigenous 46100 LFP cell, which is currently awaiting approval and could be integrated in vehicles from next quarter. For the uninitiated, LFP batteries rely on iron and phosphate instead of the usual nickel, manganese, and cobalt (NMC). That makes them less vulnerable to commodity price swings and helps keep costs in check.

They also offer an advantage in terms of design. For context, the 46100 format is physically larger than Ola’s current 4680 Bharat Cell, which uses NMC chemistry. That means each cell can hold more active material, reducing the number of cells needed in a battery pack. Fewer cells naturally translate to simpler assembly, fewer connections, and lower manufacturing complexity. So yeah, that’s where the cost savings will come from.

But there’s a trade-off too. These LFP cells are more affordable, but not necessarily better performers. The existing 4680 Bharat Cell still wins when it comes to energy density, performance, and delivering longer range in a lighter package. So if your goal is to buy an EV two wheeler with high-speed performance or a range of up to 500 km (Indian Driving Cycle), LFP batteries may struggle to match what the 4680 cells can deliver.

So the only thing these new batteries do for Ola is add another option that leans more toward cost efficiency than top-end performance.

Even then, this feels like a thoughtfully smart move because LFP batteries are known for better thermal stability and longer cycle life. In simple terms, they run cooler, last longer, and reduce warranty risks, which makes them especially suited for hot-weather markets like India. Of course, LFP batteries have lower energy density, so to deliver the same range as an NMC pack, you might need a slightly bigger or heavier battery.

But if you look at it purely from an economics lens, you’ll see that if a battery lasts longer and needs fewer replacements, the overall cost of ownership improves, even if the headline range is a bit lower.

And that’s where the strategy starts to come together. The 4680 NMC cell can continue to power premium offerings where performance, range, and lighter weight matter more. On the other hand, the 46100 LFP cell gives Ola a way to push affordability, scale up volumes, and even tap into opportunities like energy storage.

But does all of this mean that Ola is actually on track for a comeback?

Well, that’s a tricky call. Because despite the recent momentum, the numbers still raise questions. In Q3 FY26, for instance, Ola’s EBITDA margin stood at -68.7%. And to break even, meaning to stop making operating losses, the company needs to sell around 15,000 units a month. But it’s still consistently not there yet.

There’s also a credibility gap that’s hard to ignore. Over the past year, Ola has changed its targets multiple times. At the start of FY26, it cut its sales and revenue guidance by about 30%. And its breakeven target has been revised not once, but thrice from 50,000 units to 25,000, and now to 15,000 units in the Q3 FY26 earnings call. That’s a 70% drop in just nine months. So even if the company is working to bring costs down, that kind of shift feels a bit stretched.

Another piece of information to back this up is that about 85–90% of Ola’s operating expenses are fixed, while only 10–15% are variable. Now this looks great when sales go up, because every additional scooter sold can significantly boost profits, as most costs are already covered.

But the flip side is that if sales don’t pick up as expected, those fixed costs don’t go away. And with limited room to cut further, losses can pile up quickly. So in many ways, Ola doesn’t have too many levers left to pull. And the only option left now is to deliver on this new, “steady” operating model it’s talking about.

Which means the real answer won’t come from announcements or short-term stock moves, but from the Q4 results, which will be the real test. Because if the numbers don’t follow through, the optimism we’ve seen in the past few days could fade just as quickly.

Until then…

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