Ola Electric is renegotiating agreements with its vehicle registration agencies to lower costs and streamline the registration process. The move is part of the company’s broader efforts to optimize operations as it continues its direct-to-consumer (D2C) approach.
In a regulatory filing, the electric vehicle (EV) manufacturer confirmed discussions with Rosmerta Digital Services Private Ltd and Shimnit India Private Ltd to revise contract terms. “We are renegotiating the terms of agreement with our agencies to reduce costs and enhance registration process efficiencies,” Ola Electric stated.
Temporary Dip in Registrations Amid Ongoing Talks
Ola Electric clarified that the renegotiation process might temporarily impact registration figures for February 2025 on the VAHAN portal. However, the company assured that this would not affect its overall sales performance. “Sales will continue to remain strong through February 2025, and any dip in registrations will be streamlined in the coming weeks,” the statement added.
Unlike traditional automakers that sell through dealerships, Ola Electric operates via company-owned experience centers as part of its direct-to-consumer model. This strategy relies heavily on third-party agencies for vehicle registration, making contract negotiations with these agencies crucial for operational efficiency.
Financial Struggles and Path to Profitability
The contract renegotiations come amid financial headwinds for Ola Electric. The company reported a widened loss of ₹564 crore in Q3 FY2025, compared to ₹376 crore in the same period last year. Revenue also declined 19% year-on-year to ₹1,045 crore from ₹1,296 crore.
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In a statement to stock exchanges, Ola Electric emphasized its long-term strategy for profitability, which includes:
- Improving gross margins
- Optimizing operating costs
- Expanding its product portfolio to include motorcycles and fleet-specific EVs
- Strengthening its technology leadership in the electric vehicle space
As the company restructures its operations, all eyes are on how these cost-cutting measures and strategic moves will position Ola Electric in the competitive EV market.
