“The budget for the full 5 GWh plant is INR 2,800 Cr… We will be completing the 5 GWh installation by the end of FY26… Given that the EV market has evolved slower in recent quarters, we don’t foresee the need to expand beyond 5 GWh till FY29.”

This was what Ola Electric said about its cell manufacturing capacity in its Q1 shareholders’ letter in July 2025. But, within three months, the company has had a change of plans. It now intends to scale its capacity to 5.9 GWh by March 2026 and further to 20 GWh by the second half of 2027.

Behind this change is the Bhavish Aggarwal-led company’s transition to becoming an electric vehicle and energy storage company, rather than just the former. The question is if this would be enough to help the company go past the profitability line.

But, before we delve into it, let’s first take a look at the company’s headline numbers for Q2 FY26.

The company managed to reduce its consolidated net loss by over 15% YoY and 2.3% QoQ to INR 418 Cr during the quarter on the back of cost control and improvement in margins. However, its operating revenue plunged 43% YoY and 16.7% QoQ to INR 690 Cr in September 2025 quarter.

Behind the sharp decline in revenue was reduction in vehicle sales and market share, even as the company said the auto segment turned EBITDA positive in the quarter if its total income was taken into consideration.

Auto Segment Turns Focus On Profitability

Lower operating expenses, cost-cutting measures, and vehicles built on its Gen 3 platform helped Ola Electric’s auto segment post an EBITDA of INR 2 Cr and improve gross margin to 30.7% in Q2.

With the company beginning the deliveries of vehicles integrated with its in-house manufactured Bharat 4680 cells, it expects the auto segment’s gross margin to rise to about 40% by the end of FY26 and operating expense to reduce to INR 225 Cr by Q1 FY27 from INR 258 Cr in Q2 FY26.

However, the EBITDA improvements came at the cost of declining vehicle deliveries and market share. The company, which once held around 50% market share in the two-wheeler EV market, has slipped below

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