Ola Electric: Tesla of scooters

Early Stage:

Bhavish Aggarwal founded Ola Electric in 2017 as a visionary entrepreneur determined to transform India's mobility ecosystem. He graduated from IIT Bombay in 2008 with a computer engineering degree. Back in 2017, Ola Cabs (run by Bhavish Aggarwal) was already one of India’s largest ride-hailing companies. But Bhavish saw a problem — India’s cities were getting more polluted, fuel prices were rising, and the future of transport clearly had to be electric. To explore the idea, Ola set up a small team and created a separate company called Ola Electric Mobility in 2017. At first, the goal was not to make scooters. They started with electric rickshaw and electric car experiments for Ola’s cab fleet in cities like Nagpur. The project tested how EVs could work in Indian conditions and what problems drivers faced — things like high vehicle cost, slow charging, and lack of charging stations.

By 2018–2019, after getting funding from big investors like SoftBank and Tiger Global, Ola Electric realized two things:

1. India’s biggest two-wheeler market was ready for disruption.

2. Making their own EVs, instead of relying on other manufacturers, would give them control over design, performance, and cost.

In May 2020, Ola Electric acquired Amsterdam-based Etergo—a startup known for its award-winning AppScooter, often described as the “Tesla of scooters.”

Because of this, Ola didn’t need to do its R&D from scratch — it got a ready-made scooter design, proven battery and motor technology.

 Post-acquisition, Ola localized the design for the Indian market — reducing costs, re-engineering parts for mass production, and setting up the Ola Futurefactory in Tamil Nadu.

In August 2021, Ola Electric entered India’s two-wheeler market with a bang, launching the Ola S1 and S1 Pro. The company promised a stylish, feature-rich electric scooter with strong performance, long range, and competitive pricing. Pre-orders broke records — over 100,000 bookings in 24 hours — and Bhavish Aggarwal positioned Ola Electric as the Tesla of India’s two-wheelers.

But the journey after launch was not smooth. Early customers faced delivery delays, and some complained about quality issues such as panel gaps, software glitches, and inconsistent range. Ola promised fast fixes through over-the-air (OTA) software updates. While sales grew, Ola Electric faced public scrutiny after a few fire incidents in 2022, leading to a temporary recall of scooters to check battery safety. The company also faced criticism for its after-sales service network, which was initially online-only.

Despite challenges, Ola Electric scaled up production at its Futurefactory in Tamil Nadu — one of the largest two-wheeler manufacturing plants in the world. 

By 2023–24, Ola became the market leader in India’s EV two-wheeler segment. Ola’s market share quickly shot past 35%, even touching 50% at its peak. For a company that was barely 4 years old, this was incredible success.

In August 2024, Ola Electric made history by becoming the first Indian electric vehicle company to go public on the stock market. The company raised ₹6,145 crores in its Initial Public Offering (IPO).

Behind the success story, serious problems were building up. The most obvious issue was with the scooters themselves. Customers started complaining that their Ola scooters were breaking down frequently. Motors would fail, software would glitch.

The service experience was terrible too. Ola had chosen a "direct-to-customer" model, meaning they didn't work with traditional dealers. Instead, they had their own service centers. But these centers were completely overwhelmed. Customers were waiting 30-45 days just to get their scooters repaired.

By 2024, Ola Electric was receiving around 80,000 customer complaints every single month. On busy days, they got 6,000-7,000 complaints. Service centers had thousands of broken scooters piled up, waiting for repairs. Some customers called these places "scooter graveyards".

The most shocking decline was in market share. In June 2024, Ola Electric had 46% of India's electric scooter market. By June 2025, this had crashed to just 19%.

What happened? Traditional vehicle companies like Bajaj Auto and TVS Motor Company entered the electric scooter market. These companies had something Ola didn't - thousands of dealers and service centers across India. When customers had problems, they could easily get help.

In 2025, Ola opened its massive Gigafactory in Krishnagiri, Tamil Nadu, to power India’s EV revolution. Built to produce batteries for 1 million vehicles every year, it runs on renewable energy and cuts costly imports.

At the core of this plan is the Bharat Cell, Ola’s own lithium-ion battery made for India’s climate, roads, and price needs. By producing cells locally, Ola can lower costs, improve safety, and deliver better performance.

The Bharat Cell is built on the 4680 format (46 mm × 80 mm), first popularized by Tesla. Bhavish Aggarwal chose it for its higher energy density, better thermal management, lower production cost, fast charging, high power output, and local Made-in-India advantage.

Today, the Gigafactory makes about 1.4 GWh of batteries a year, and Ola plans to scale it to 5 GWh by 2026. In the long run, the vision is even bigger—20 GWh in the next few years.

After scooters, Ola has now introduced electric bikes to enter the motorcycle market. The company plans to launch premium models like the Roadster, Diamondhead, Cruiser, Adventure, and Sportster. At present, only a handful of companies such as Matter, Revolt Motors and Oben Electric manufacture electric motorcycles in India. Although motorcycles powered by internal combustion engines make up nearly two-thirds of India’s two-wheeler market, the penetration of electric motorcycles is a negligible 0.1 per cent.

Bhavish's Story:

A lot of people make fun of Bhavish Aggarwal, saying he wants to become the next Elon Musk. But here’s the thing—he’s a true visionary, works incredibly hard, and is exceptionally good at raising money from investors. Yes, Ola Electric has many problems, mainly around product quality. But what if I told you that Tesla and Elon Musk faced similar issues in their early days?

Tesla’s first cars, the Model S and Model X, had inconsistent build quality, large panel gaps, poor paint finishes, and misaligned components. It was only with the launch of the Model 3 in 2017 that Tesla began fixing these problems, steadily improving quality over time. Elon never gave up, despite harsh criticism from customers and the market. And because of that persistence, Tesla turned into a global EV leader.

So, there’s a real chance Bhavish could repeat a similar story. I

know it's highly speculative but it is

possible. Ola Electric set out to build a scooter from scratch, and they did it in about a year after announcing it. Yes, service-related issues remain, but the company is now expanding service centers to solve them—something they initially underestimated.

What’s next? Ola is entering the electric motorcycle market, which is even larger than the scooter market, and after that, it plans to launch an EV car. And remember—one successful product is enough to make people forget past mistakes.

But Ola’s vision isn’t just about vehicles. The company is building an entire EV ecosystem in India. Its Gigafactory is the country’s first lithium-ion cell manufacturing facility. Next to it is the Future Factory, which Ola wants to turn into the world’s largest EV hub—producing scooters, bikes, and eventually cars. On top of that, Ola is developing the Hypercharger network, with plans for 100,000+ charging stations across 400 cities.

In short, Bhavish isn’t just building scooters—he’s trying to build India’s EV future. He wants to do in five years what would normally take decades. Right now, Ola’s journey looks rough, but if just one of these bets pays off, the narrative could flip completely.

Enough Story let's convert Narrative into Numbers 

Revenue growth:

The Indian scooter market reached a record size of ₹58,932 crores in Financial Year 2025, representing a robust 17% year-over-year growth from FY2024. 6.85 million scooters were sold in FY2025.

The market is dominated by Internal Combustion Engine (ICE) scooters at ₹51,680 crores (86.1% market share), while Electric scooters contribute ₹8,348 crores (13.9% market share). Electric scooters sold 773,000 units in FY2025, comprising 11% of total scooter sales.

Honda maintains market leadership with a 42% market share, generating an estimated ₹24,752 crores in revenue through its Activa range. TVS holds the second position with 26% market share (₹15,322 crores), primarily driven by its Jupiter series. Bajaj Auto has doubled its market share to 4% (₹2,360 crores), while other manufacturers collectively account for 28% of the market.

The scooter market is projected to expand from 6.85 million units in 2025 to between 15.2-20.3 million units by 2035.

The market value is expected to grow from ₹58,932 crores in 2025 to ₹175,865-258,748 crores by 2035, achieving a value CAGR of 11.6-15.9%

Sooner or later, about 80% of scooters will become electric. This means the electric scooter market could reach around ₹1,40,692 to ₹2,06,998 crores.

Here, I am assuming that Ola will eventually fix its service issues and improve the software glitches, which is possible if the company focuses on it. The Gen 3 and future scooters are also likely to have fewer problems. If this happens, Ola can rebuild its brand name. In the long run, the company could maintain a 20% market share and generate about ₹35000 crore in revenue after 10 years.

Here, my story as electric scooter company. I haven't consider it's potential success in motorcycle, three wheeler and cars. If we include all potential revenue streams in the valuation then where is the upside left for investors?

Margin:

In the long run, Ola Electric could reach 15% EBIT margins if it executes well. The key drivers would be:

Scale – higher sales reduce fixed costs per scooter.

Battery savings – own gigafactory and falling global cell prices.

Premium products –higher ASP models improve profitability.

Services – subscriptions, financing, and software add high-margin revenue.

The risks are brand damage from quality issues, price wars, and execution delays. Still, if Ola builds scale and controls costs, 15% margins are achievable.

Reinvestment:

To reach ₹35,000 crore revenue in 10 years, Ola Electric will need to keep reinvesting heavily.

Right now, Ola has already invested about ₹3,500–4,000 crore in plants and infrastructure. But this is not enough for the scale We are aiming at. Based on how much sales each rupee of capital can generate, Ola will likely need a total investment of ₹15,000–20,000 crore to support ₹35,000 crore in sales.

That means Ola will have to reinvest another ₹10,000–15,000 crore over the next decade. Most of this money will go into:

Expanding scooter factories to make millions of vehicles.

Building the battery gigafactory (a very large chunk).

R&D and new product development.

Service, charging, and distribution network.

Risk/ failure rate:

The automobile industry is a discretionary business—customers can delay or defer purchases. Because of this, the sector typically carries a higher unlevered beta (1.25), which results in a higher cost of equity (14.24%).

In Ola’s case, the company also carries significant debt of about ₹3,556 crore. For a loss-making business, such leverage is risky and leads to an Higher cost of debt (17.93%).

Taking both equity and debt into account, Ola’s overall cost of capital comes to 14.74%.

I assume only a 5% probability of failure. This relatively low rate is because Bhavish Aggarwal has proven to be exceptionally skilled at raising capital from investors, which reduces the near-term financing risk.

DCF Valuation:

Surprisingly, I didn’t expect such a low price. Here, I assume Ola is mainly an electric scooter company. I may be underestimating its potential if it can repeat the scooter success in motorcycles or car. I expect Ola to capture around 20% market share, but the market might be expecting more. So, let’s run a reverse DCF to see how much revenue is required to justify the current price.

It will need about ₹65,000 crore revenue to match the current price. For that, Ola must keep around 35% market share in electric scooters or achieve similar success in motorcycles as well.

Data & Spreadsheets:

Ola Electric DCF Spreadsheet