A reduction in service and warranty expenses cut expenses by 32 units, while headcount optimization brought it down by 29 units. Together, various changes result in a projected Q1 FY26 monthly operating expense of 110 units from 178 units six months earlier.
12 Mar 2025 | 2158 Views | By Arunima Pal
Ola Electric Mobility said it has successfully completed its Network Transformation and Opex Reduction Program, a company-wide initiative launched in November 2024. The program has delivered a sustainable cost reduction of ₹90 crores per month, positioning the company to achieve Automotive segment EBITDA breakeven in the first quarter of fiscal ...
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Ola Electric Mobility said it has successfully completed its Network Transformation and Opex Reduction Program, a company-wide initiative launched in November 2024. The program has delivered a sustainable cost reduction of ₹90 crores per month, positioning the company to achieve Automotive segment EBITDA breakeven in the first quarter of fiscal year 2026 (April-June 2025).
According to the regulatory filing submitted to the National Stock Exchange of India and BSE Limited on March 12, 2025, the financial impact of these initiatives will begin to fully reflect from April 2025.
The program implemented several key operational changes including closure of all regional warehouses, with vehicles, spare parts, and accessories now shipping directly from the factory to stores; automation of registration and other processes; and productivity improvements across the sales and service network.
These changes have yielded significant operational benefits such as reduction in average vehicle inventory from approximately 35 days to 20 days, decrease in customer delivery time from 12 days to 3-4 days, and increase in daily vehicle registrations to over 800 per day, surpassing the average daily sales for January-February 2025.
The accompanying charts in the filing reveal substantial improvements in Auto Segment Operating Expenses. Assuming that the 3 FY25 monthly average expense was at 178, the company has achieved reductions through various initiatives in service and warranty, headcount optimization, and network transformation, with some offset from network expansion. The reduction in service and warranty expenses cut expenses by 32 units, while headcount optimization brought it down by 29 units. Together, various changes result in a projected Q1 FY26 monthly operating expense of 110 units, representing a significant decrease from previous levels, the company said, without giving the actual amounts.
It also reported a dramatic improvement in daily vehicle registrations. After fluctuating at lower levels through February (with figures as low as 16 registrations on February 16), registrations have surged in March, reaching 698 on March 6 and peaking at 860 by March 9. This upward trajectory suggests the company is making significant progress in addressing previous registration bottlenecks.
"These structural improvements position the company for strong long-term profitable growth," stated the filing.