Ola Electric claims cost reduction program will save ₹90 crore a month, achieve EBITDA break even for next quarter
The actions include shutting regional warehouses and shipping vehicles, parts and accessories directly to stores, as well as automating registrations.
Ola Electric announced on Wednesday that it has successfully finished implementing a company-wide cost cutting program, resulting in savings of ₹90 crore a month.
Dubbed the Network Transformation and Opex Reduction Program, its actions include shutting regional warehouses and shipping vehicles, spare parts and accessories from the factory directly to stores, as well as automating registrations and other processes.
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The company said that as a result, it expects to break even on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the next quarter, which is the first quarter of the financial year 2025-26.
It also added that this has resulted in reducing the average vehicle inventory to 20 days from approximately 35 days, and also reducing the delivery time for customers from 12 days to 3-4 days.
The new changes in the vehicle registration process in particular are in the final stages as of now, according to the company's statement.
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The announcement comes at a time when the company has been facing a myriad of issues such as transport authorities across various states conducting raids, closing showrooms, seizing vehicles and sending show-cause notices due to the stores for allegedly not having trade certificates.
The company had denied the allegations.
Prior to this, the company was also met with negative spotlight due to a multitude of consumer complaints on social media citing poor ownership and service experiences. Comedian Kunal Kamra also had engaged in online verbal spats with the company's founder Bhavish Aggarwal for this reason.
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How did Ola Electric shares perform?
At 12:30 pm IST, Ola Electric Mobility Ltd shares were up 0.55% or by ₹0.28 on the Bombay Stock Exchange, trading at ₹51.19. The intraday high was ₹52.58.
