The rating agency said it considered a consolidated view of Ola Electric and its subsidiary for the rating downgrade. It said that the “material underperformance” in the company’s sales volume
Notably, after months of decline in its registrations, the company’s EV registrations more than doubled to 9,496 units in March 2026 from 3,973 units in February
Taking this into consideration, ICRA said that the company’s management implemented corrective actions and service metrics improved “meaningfully” in 2026 and the key operating metrics are stabilising
Credit rating agency ICRA has downgraded the rating of Ola Electric’s subsidiary Ola Electric Technologies Pvt Ltd rating due to underperformance in the company’s sales volume and revenue anticipations.
The rating agency said it considered a consolidated view of Ola Electric and its subsidiary for the rating downgrade. It said that the “material underperformance” in the company’s sales volumes and revenues relative to earlier expectations have extended the timeline for profitability and impacted near-term financial flexibility.
“While ICRA recognises the recent improvements made by the company in improving unit economics and controlling costs, its interplay with volume growth and market share recovery will be a crucial factor for supporting the credit profile,” ICRA added.
It also said that intensified competition from legacy OEMs such as TVS Motor and Bajaj Auto has affected Ola Electric’s market share. It highlighted that the Bhavish Aggarwal-led company’s market share in the two-wheeler EV market declined to low double digits in FY26 from 30% in FY25.
“This contraction reflects both external pressures, including intensified competition and subsidy rationalisation, as well as company‑specific factors such as weakened brand perception arising from service execution issues and adverse media coverage,” the rating agency added.
Notably, after months of decline in its registrations, the company’s EV registrations more than doubled to 9,496 units in March 2026 from 3,973 units in February, as per Vahan data.
In a statement, the company claimed its registrations crossed 1,000 units per day in the last week of March on the back of unveiling a campaign to offer discounts of up to ₹50K across its portfolio and offering some variants for as low as ₹49,999.
Taking this into consideration, ICRA said that the company’s management implemented corrective actions and service metrics improved “meaningfully” in 2026 and the key operating metrics are stabilising. However, the recovery in brand perception and walk‑in demand has lagged operational improvements, it added.
ICRA also called Ola Electric’s entry in the battery energy storage segment as “strategically positive” but added that it would add to execution and funding risks in the near to medium term, given limited monetisation visibility at this stage.
“The entity is, however, likely to have the ability to mobilise funding for cell manufacturing, supported by investor interest in innovative, next-generation technologies that contribute to reducing import dependence. The funds, if mobilised, will aid stabilisation and prospects of the battery cell business of the Ola Group,” it added.
While Ola Electric is yet to disclose its financial results for the last quarter of FY26, it managed to trim its net loss for the December 2025 quarter by 14% to ₹487 Cr from ₹564 Cr in the year-ago quarter. However, its revenue plunged 55% YoY and 32% QoQ to ₹470 Cr. Including other income of ₹33 Cr, total income for the quarter stood at ₹504 Cr.
Shares of Ola Electric were trading 0.83% lower at ₹36.01 on the BSE at 13:25 IST.
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