ICRA downgrades Ola Electric on weak sales, delayed profitability
03 May 2025

Prominent credit rating agency ICRA Ltd has downgraded the debt of Ola Electric Technologies Ltd, a key subsidiary of listed Ola Electric Mobility Ltd.

The move comes after a sharp decline in electric scooter sales in April 2025.

The decline has raised concerns over the company's continued cash burn and delayed profitability.

Despite being India's largest electric two-wheeler manufacturer, Ola Electric is battling increased competition and operational issues.

Sales and credit facilities affected
Sales drop

Ola Electric's vehicle registrations almost halved in April 2025, to 19,709 units from over 34,000 units a year ago.

ICRA downgraded four credit facilities worth ₹1,887 crore from 'A (Negative)' to 'BBB+ (Negative).'

The agency cited slower-than-expected scale-up in Ola Electric Mobility's electric two-wheeler sales volumes as the reason for the downgrade.

Estimated losses and operational challenges
Financial forecast

ICRA estimates Ola Electric's full-year losses for FY25 may expand to ₹1,900-2,000 crore from ₹1,600 crore in FY24.

The company posted a net loss of ₹564 crore in the December 2024 quarter alone, up from ₹376 crore a year ago.

Despite selling 344,009 units in FY25—a slight increase over the previous year's sales—Ola Electric has struggled with operations and fierce competition from rivals like Bajaj Auto, TVS Motor, and Ather Energy.

Stock performance and registration issues
Market impact

Since the beginning of 2025, Ola Electric's share price has plummeted 44%. This is compared to a paltry 4% dip in Nifty Auto.

In February, the company terminated contracts with two registration agencies, resulting in disrupted scooter registrations and scrutiny from multiple Indian government ministries.

Despite this, Ola claimed it sold 25,000 vehicles that month, but only about 8,500 were registered due to these complications.