Shares of Indian electric vehicle (EV) firm Ola Electric rose by 5.07% on July 14, 2025, increasing from Rs 39.98 (US$0.48) to Rs 42.01 (US$0.51) per share.

This rise followed the company’s optimistic financial projections for FY26, despite a widening consolidated loss in Q1 FY26.

Ola Electric expects revenue between Rs 4,200 crore (US$506 million) and Rs 4,700 crore (US$566.27 million) for FY26.

The company plans to sell between 325,000 and 375,000 vehicles.

Ola Electric projects an EBITDA of over 5% for its auto business, citing benefits from the Production Linked Incentive (PLI) starting in Q2.

The company also anticipates gross margin growth to 35–40%.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Production linked incentives driving EV sector profitability inflection point

India’s PLI scheme is creating a clear financial turning point for domestic EV manufacturers, with Ola Electric being a prime example of policy impact on company economics.

The government allocated ₹25,938 crore over five years specifically to incentivize local production of EV components including batteries and motors 1, directly contributing to Ola’s forecast of full-year EBITDA exceeding 5% in FY26.

Ola’s gross margins jumped dramatically from 13.8% in Q4 FY25 to 25.6% in Q1 FY26, with the company explicitly stating that PLI benefits starting in Q2 will further enhance profitability 2.

This margin improvement through vertical integration aligns with the PLI scheme’s goal of creating a self-sufficient domestic EV supply chain rather than reliance on imported components 1.

The financial transformation is particularly significant given Ola’s substantial scale, with its “Future Factory” in Tamil Nadu ranking among the world’s largest two-wheeler manufacturing facilities 3.

2️⃣ Established automotive players overtaking EV startups in India’s maturing market

Traditional vehicle manufacturers are successfully leveraging their existing infrastructure and customer trust to overtake early EV innovators in India, demonstrating a predictable pattern in industry evolution.