Ola Electric Boosts Manufacturing Capacity with INR 2,000 Crore Infusion

Electric vehicle (EV) giant Ola Electric's board of directors has approved a cumulative investment of INR 2,000 Cr just days before the company reports its financial results for the fourth quarter. The company's cell manufacturing division, Ola Cell Technologies Pvt Ltd (OCT), and its vehicle manufacturing division, Ola Electric Technologies Pvt Ltd (OET), will both receive this investment.

The corporation plans to invest INR 500 Cr in OCT, with the remaining INR 1,500 Cr going into OET. Ola Electric's main vehicle manufacturing division saw an 8% year-on-year drop in revenue to 4,717.48 Cr INR in FY25. The fiscal year saw a multi-fold increase in OCT's turnover to INR 73 Cr. Completion of the transactions is anticipated by May 15, 2027. According to a recent disclosure by Ola Electric, the business requirements of the subsidiaries would be supported by the funds infused by the company.

Ola Electric Aiming to Expand its Presence in India

This investment follows rumours that Ola Electric was seeking an outside investment of INR 2,000 Cr, which surfaced a few weeks ago. The company's plan was to attract investors from sovereign wealth funds and international infrastructure funds by offering them minority stakes in its battery division. Nevertheless, no investment of this kind has transpired thus far. The internal investment is the latest in a series of shakeups the firm has been undergoing in response to increasing financial pressures over the past few months. Redirecting INR 575 crore from R&D to other goals was approved by the company earlier in March.

It is proposed to reallocate INR 475 Cr to repay or prepay debt, while INR 100 Cr will be used for organic growth initiatives. On May 18, Ola Electric will reveal its financial results for the last quarter of fiscal year 26 (Q4 FY26). The net loss for the third quarter of FY26 was INR 487 Cr, down from INR 564 Cr a year earlier, a reduction of 14% year-on-year. Despite a drop in losses, the top line took a hit. The operational revenue of the business fell 32% quarterly and 55% year-on-year, reaching INR 470 Cr.

Ola Electric Navigating Through Challenges

For the nine months ending December 31, 2025, the company's auditor had noted a negative cash flow from operations of INR 866 cr. Operating losses and slower-than-expected sales growth were the main causes of this negative cash flow. Despite the recently proposed investment, the company's cash on hand was INR1,991 Cr at the end of December, according to its Q3 shareholder letter.

Due to underperformance in sales volumes and declining market share, OET's rating was downgraded by credit rating agency ICRA. While acknowledging execution and funding risks in the near to medium term, ICRA reaffirmed its rating on OCT, highlighting the cell business' strategic importance to the group.