- Ola Electric to close most company-owned stores by December, shifting to dealers
- 255 dealer partners operate 319 stores; target 700 stores by March 2027
- Monthly production expected to reach 25,000 vehicles by December 2026
Ola Electric Mobility is preparing to shut most of its company-owned stores even as it claims demand for its electric scooters is running ahead of supply. The move, the company says, is not a sign of weakening demand but part of a broader shift towards a dealer-led business model aimed at lowering costs and improving financial performance.
In its Q2 FY27 shareholders' letter, Ola Electric said it stopped taking orders through its direct-to-consumer (D2C) stores from November 1. Most of these outlets are expected to close by December, with fresh vehicle production now being routed entirely through dealer partners.
The company said it had appointed 255 dealer partners operating 319 stores as of November 8, barely two months after the first outlets became operational on September 4. It aims to expand the network to around 450 stores by December and 700 by March 2027.
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The transition is also expected to reduce operating expenses by another Rs 50 crore, as Ola moves away from running its own retail network. Consolidated operating expenses stood at Rs 369 crore in Q2, compared with Rs 390 crore in the previous quarter, excluding a one-time non-cash reversal of Rs 57 crore in Q1.
Ola Electric said that its biggest challenge is not finding buyers but getting suppliers to ramp up production. The company said it expects monthly production to reach around 25,000 vehicles by December, adding that its manufacturing facility has the capacity to produce significantly more than current output.
It also disclosed that around 5,000 vehicles against paid orders in September were delivered a week late due to charger unavailability. A paid-order backlog has since built up as production struggles to catch up with demand.
The dealer-led model is expected to improve working capital as partners pay for vehicles when placing orders and hold inventory themselves. Ola said dealer-channel inventory currently stands at around 15 days, while sales are gaining traction in markets where its partners have been operational for longer.
Consolidated gross margin remained broadly stable at 29.93% in Q2, against 30.5% in Q1, despite higher commodity costs. However, operating EBITDA loss widened to Rs 218 crore from Rs 165 crore in the previous quarter. Adjusted operating EBITDA loss stood at Rs 246 crore.
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Ola also highlighted a sharp reduction in borrowings. Total debt declined to Rs 1,819 crore in September 2026 from Rs 3,132 crore in December 2024, while borrowings in the automotive business fell to Rs 337 crore from Rs 2,422 crore.
Beyond scooters, the company is banking on its cell manufacturing business as another growth driver. It has commissioned 6 GWh of capacity and expects to gradually integrate its own LFP cells into vehicles from Q4 FY27.
For Ola, closing its own stores is therefore less about retreating from the market and more about changing how it sells. Whether the leaner dealer network can translate its claimed demand momentum into sustained profitability remains the bigger question.
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