Ola Electric shares rally 5% on policy talks to speed EV adoption

Ola Electric is trading above six of its eight key simple moving averages, indicating short-term bullish undertones, though it remains below the 150-day and 200-day SMAs, signaling long-term caution.

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Shares of Ola Electric Mobility rose as much as 4.7 per cent to ₹ 49.40 on BSE on Monday after reports that Niti Aayog has called a high-level meeting with leading two-wheeler makers to accelerate the electrification of motorcycles, a segment that dominates India’s market but has seen negligible EV adoption.According to a Hindu Business Line report, Niti Aayog officials will meet executives from Hero MotoCorp, Bajaj Auto, TVS Motor, Ola Electric, Ather, and Revolt to explore strategies for expanding the electric motorcycle segment. While scooters make up about one-third of India’s two-wheeler market and EVs already hold nearly 15 per cent share in this category, motorcycles, which account for two-thirds of the market, have just 0.1 per cent penetration.Government projections suggest that by 2030, electric scooters could reach 80 per cent of sales, while electric motorcycles may capture only about 10 per cent. Together, that would bring overall two-wheeler electrification to around 36 per cent, far below policy targets unless motorcycles accelerate their transition.

Industry insiders told Hindu Business Line that Monday’s discussions are expected to focus on cost reduction, innovative financing models, and battery swapping, aimed at addressing high upfront prices, the biggest barrier for electric motorcycles.

Unlike scooters, which benefitted from China’s models and supply chains, electric motorcycles lack such a foundation, forcing Indian companies to build from scratch. While start-ups like Ola, Revolt, Matter, and Oben are driving early momentum, legacy giants such as Hero MotoCorp, Bajaj Auto, Honda, and TVS have yet to launch EV motorcycles, even as they expand their electric scooter portfolios.

GST policy

Earlier this month, Prime Minister Narendra Modi announced that the government plans to lower GST rates on several goods and services by Diwali, with proposals including a cut on small cars to 18 per cent from 28 per cent.

HSBC Global Research said the move “may positively impact auto demand, though OEM-wise impact may vary,” while cautioning it could hurt EVs if states respond by raising road taxes.

Nomura echoed the concern, noting that “if the GST cut on ICE vehicles happens, it is likely to significantly impact EV adoption, as the price gap between EVs (taxed at 5 per cent) and ICE vehicles (taxed at 28 per cent plus cess) would narrow sharply.”

Earnings backdrop

For the June quarter, Ola Electric reported a consolidated net loss of ₹ 428 crore, up 23 per cent year-on-year, as revenues halved to ₹ 828 crore. EBITDA losses widened to ₹ 237 crore, with margins slipping to -28.6 per cent from -12.5 per cent a year earlier.

Sequentially, however, the company narrowed losses and expanded gross margins by 1,100 bps QoQ to 26 per cent by June-end. Management expects the auto business to turn EBITDA positive in Q2 and has guided for 35–40 per cent gross margins for FY26.

Analysts’ view

Anirudh Garg, Partner and Fund Manager at INVasset PMS, said investors appear focused on Ola’s execution and long-term growth rather than near-term volatility. “The stock’s performance underscores the market’s focus on operational execution and the company’s expansion trajectory rather than short-term policy noise,” he noted.Garg added that while a potential GST cut on small cars and two-wheelers could make internal combustion vehicles cheaper and pose near-term challenges, Ola’s Gen-4 platform, spanning electric cars, rickshaws, and light commercial vehicles, positions it well for the long haul.

Technical indicators

On the charts, Ola Electric is trading above six of its eight key simple moving averages, indicating short-term bullish undertones, though it remains below the 150-day and 200-day SMAs, signaling long-term caution.

The stock’s RSI stands at 59.4, indicating it is neither overbought nor oversold, while the MACD remains in bullish territory.