Ola Electric Mobility , a prominent player in India's electric vehicle market, is facing multiple challenges as it navigates financial and legal hurdles. The company has been hit with a credit rating downgrade and accusations of technology theft, potentially impacting its market position and future growth prospects.

Moody's Credit Rating Downgrade

Moody's Investors Service has lowered Ola Electric's credit rating to CAA1 and assigned a negative outlook to the company. This rating is considered to be of poor standing and subject to very high credit risk.

Implications of the Downgrade

The CAA1 rating with a negative outlook could affect Ola Electric in several ways:

1. Higher borrowing costs: The company may face increased interest rates for future debt.
2. Investor confidence: Raising capital could become more challenging.
3. Market perception: The downgrade might influence how stakeholders view the company's financial stability.

Technology Theft Accusations

In a separate development, LG Energy Solution has accused Ola Electric of accessing confidential battery technology through a former researcher. The allegations include:

• A former LG researcher allegedly leaked proprietary information about pouch-type ternary lithium-ion battery manufacturing processes to Ola Electric.
• The ex-researcher is under investigation by South Korean authorities and has admitted to transferring information but denies knowing it was confidential.

Legal and Technological Challenges

These accusations add to Ola Electric's existing legal challenges:

• A previous dispute with MapmyIndia over license agreement violations.
• Questions from industry experts about the originality of Ola's technology development, despite the company being India's top patent filer with 205 patents.
• Suggestions that the company may have copied designs rather than developing them independently.

Ola Electric's Position

Despite these challenges, Ola Electric has made significant strides in the electric vehicle market:

• Launched its own lithium-ion cell production.
• Maintained a strong position in India's electric scooter market.

Looking Ahead

As Ola Electric faces these financial and legal challenges, the company's response and ability to maintain its market position will be crucial. The electric vehicle market in India continues to grow and evolve, and Ola Electric's navigation of these issues will be critical to its long-term success.

Investors and industry observers will likely be watching closely to see how Ola Electric addresses these challenges and what steps it takes to improve its financial position, credit rating, and legal standing.

Ola Electric Mobility Limited has reported a significant milestone in its Q2 FY26 financial results, marking its first quarter of profitability in the auto segment. The company also announced its expansion into the energy storage sector with the launch of Ola शक्ति, a residential Battery Energy Storage System (BESS).

Auto Segment Turns Profitable

Ola Electric's auto business achieved a positive EBITDA margin of 0.3% in Q2 FY26, compared to -5.3% in the previous quarter. This improvement was driven by a substantial expansion in gross margins, which increased by 510 basis points sequentially to 30.7%. The company attributes this growth to operational efficiencies and minimal reliance on Production Linked Incentive (PLI) contributions, which accounted for only 2% of the margin expansion.

Financial Highlights

Product Performance and Innovation

Ola Electric's Gen 3 platform continues to show strong unit economics and customer acceptance. The company's Roadster model has gained traction, with Q2 sales quadrupling compared to Q1 and now representing about 15% of overall sales. Peak daily sales for the Roadster reached 450 units during the festive period.

The company achieved a significant technological milestone with India's first government-certified ferrite motor in October 2025, reducing dependency on rare-earth imports while maintaining performance standards.

Expansion into Energy Storage

Ola Electric has launched Ola शक्ति, a residential BESS using its in-house Bharat 4680 cells. This product offers twice the lifespan and higher efficiency compared to traditional lead-acid systems, integrating with rooftop solar installations and providing 5-10 hours of home backup power.

The company projects ₹100.00 crore in revenue from Ola शक्ति in Q4 FY26, with expectations of ₹1,000.00-1,200.00 crore in annual revenue for FY27, at 40-50% gross margins.

Cell Manufacturing Progress

Ola's Gigafactory has commissioned 2.5 GWh of installed capacity, positioning it as India's first operational facility at gigawatt scale. The company plans to reach 5.9 GWh capacity by March 2026 and aims to expand to 20 GWh by the second half of FY27 to meet growing demand across its auto and energy businesses.

Future Outlook

For H2 FY26, Ola Electric targets approximately 100,000 auto deliveries, reflecting a focus on margin discipline in a competitive market. The company projects FY26 consolidated revenue of around ₹3,000.00-3,200.00 crore, with new energy storage volumes expected to diversify the revenue stream starting Q4.

Ola Electric anticipates exiting Q4 with auto gross margins around 40% and segment EBITDA of approximately 5%. The cell business is expected to contribute to revenue from Q4 onward, with gross margins stabilizing at 30% by early FY27.

As Ola Electric transitions into a more diversified energy technology company, it aims to establish sustainable profitability in its auto business while activating new growth vectors in the energy sector. The company's strategy focuses on broadening its revenue base, improving structural margins, and strengthening cash conversion to support long-term growth across both automotive and energy segments.