Ola Electric founder Bhavish Aggarwal highlighted the importance of the 'pricing model' and margin structure in achieving greater market penetration. He emphasised that the company's primary focus is on the 'product,' followed by ‘volume.’
During the Q2 earnings call for fiscal year 2025, Aggarwal stated, "Brands are built through the product, not through pricing." He further explained, “Brand is an outcome of product experience of the ownership experience and obviously at the scale at which you do it.”
In a pointed remark towards competitors, Aggarwal added, “I actually feel these competitors, they're not going to be able to sustain these deep discounts as the industry scales up because they don't have the margin structure.”
The entrepreneur further explained that Ola Electric has made investments in vertically integrated manufacturing and technology to support its ability to offer deep discounts.
"Technology enables better margins because it brings the cost down," he noted.
As per the Q2 earnings call, Ola Electric’s auto segment posted a gross margin of 20.6 per cent, remaining flat on a quarterly basis, but up 12 percentage points year-on-year.
The company also reported a reduction in net loss for the second quarter, alongside a 39 per cent rise in sales. Ola Electric's net loss for the September quarter was Rs 495 crore, compared to Rs 524 crore in the same period last year. Revenue from operations surged to Rs 1,214 crore in Q2.
The company is focused on increasing its store network. Aggarwal mentioned, “We have about 780 odd stores right now. And we are in the process of expanding the company-owned stores to about 2000 by March.”
In September, Ola Electric introduced its Network Partner Program, allowing third parties such as multi-brand outlets and other retail players within the automotive ecosystem, to sell its products.
Currently, Ola Electric has 1,000 active partners selling its products, Aggarwal noted.
_20241226080052_original_image_17.webp)
