Ola Electric Faces Sales Slump, Pivots to Battery Energy Storage System

Energy

29th October 2025, 10:56 PM

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Short Description :

Ola Electric is experiencing a sharp decline in electric two-wheeler sales, prompting founder Bhavish Aggarwal to focus on a new initiative, Ola Shakti, a residential battery energy storage system. This system will leverage the company's in-house 4680 cell technology and gigafactory capabilities, with commercial deliveries expected in January. The move aims to diversify revenue streams amid intense competition and operational challenges that have led to significant sales drops and are expected to be reflected in the upcoming Q2 results.

Detailed Coverage :

Ola Electric's core business of electric two-wheeler sales is facing a significant downturn, marked by a 46.5% year-on-year and 12% quarter-on-quarter decline. This performance, particularly during festive months, has seen the company lag behind major competitors like Bajaj Auto, TVS Motor Company, and Ather Energy. Hero MotoCorp is also nearing Ola Electric's sales figures, posing a threat to its market position.

In response to these challenges and to diversify its revenue, founder Bhavish Aggarwal is shifting strategic focus to a new venture: the Ola Shakti battery energy storage system. This residential system will utilize Ola's in-house developed 4680 battery cells and gigafactory production capabilities. Commercial deliveries are slated to begin in January, with the company aiming to leverage its existing network for rapid scaling without incremental investment.

Ola Electric has also faced internal operational hurdles, including cost-cutting measures that disrupted logistics and leadership churn, alongside persistent service issues and a backlog of customer complaints. The broader Indian electric two-wheeler market itself shows signs of stagnation, with EVs forming only about 6% of the total two-wheeler market.

This diversification into energy storage aims to create a new revenue stream and reduce reliance on the volatile EV market. The company is also reportedly seeking INR 1,700 crore in debt financing.

Impact This strategic pivot is crucial for Ola Electric to offset declining two-wheeler sales and establish a new growth avenue. It highlights a broader trend of companies leveraging EV technology for energy storage solutions. However, overcoming existing operational issues and proving viability in the new energy storage market will be key challenges.

Impact Rating: 7/10

Difficult Terms: Battery Energy Storage System: A technology that stores electrical energy generated from renewable sources or the grid for later use, helping to stabilize power supply. 4680 batteries: A specific type of lithium-ion battery cell with dimensions of 46mm diameter and 80mm height, known for potential improvements in energy density and performance. Gigafactory: A very large-scale factory built for the mass production of batteries, typically for electric vehicles and energy storage. Revenue Stream: The various sources from which a company generates income.