Ola Electric has streamlined its operations by shutting down regional warehouses across India, opting instead to use its network of 4,000 retail stores for managing vehicle inventory, spare parts, accessories, and last-mile deliveries. This strategic change is expected to increase EBITDA margins by nearly 10 percentage points, improve inventory management, and speed up customer deliveries, according to sources familiar with the situation.
As part of its push to accelerate profitability, Ola Electric is overhauling its distribution network and optimizing the vehicle registration process, with an estimated Rs 30 crore in monthly savings. The company has also renegotiated contracts with its vehicle registration partners to further reduce costs.
While this shift temporarily impacted the registration numbers on the VAHAN portal in February, Ola Electric confirmed in a stock exchange filing that actual sales remained unaffected during the month. Internal sources indicated that the company is still on track to sell over 25,000 units in February, maintaining its leadership position in the electric two-wheeler market.
A senior executive at the company explained, “The redesign of our front-end network is a fundamental shift in how we handle inventory and customer service. Our previous distribution model served its purpose during our initial growth, but with our rapid expansion, we needed to evolve.”
The new distribution model allows Ola to keep inventory directly at retail locations, cutting out an entire distribution layer. This enables stores to also function as delivery hubs, reducing last-mile costs and enhancing the customer experience. The inventory pipeline has been cut to 15 days from 30, and delivery times have been shortened to 4-5 days, compared to the previous 10-day timeline, according to sources.
As India’s electric vehicle market experiences double-digit growth, driven by rising fuel prices and greater adoption in smaller cities, Ola Electric’s focus on profitability comes at a crucial time. Industry experts suggest that long-term success will depend on sustainable business models.
Ola Electric Mobility Limited is a leading electric vehicle (EV) manufacturer in India, focusing on the integration of technology and manufacturing for EVs and their components, such as battery cells. The company’s operations are primarily based at the Ola Futurefactory, where the production of EVs and key components like battery packs, motors, and vehicle frames takes place.
Ola’s research and development efforts span across India, the UK, and the US, with a strong emphasis on innovation in EV products and core components. The company is also developing a large EV hub in Tamil Nadu, which includes the Ola Futurefactory and the upcoming Ola Gigafactory.
This hub is further supported by Ola’s Battery Innovation Centre (BIC) in Bengaluru, which focuses on advancing battery and cell technology. Ola Electric operates a direct-to-customer distribution network with over 750 stores across India, alongside a strong online presence, making it the largest company-owned network of automotive experience centres in the country.
