Ola Electric’s recent stock movement suggests a recalibration in investor expectations, with attention shifting from near-term sales volatility to the company’s battery roadmap. After declining to a low of Rs 22.25 in March, the shares have recovered to around Rs 42 over a two-week period, compared with a roughly 10% gain in the Nifty over the same span.
The change in sentiment appears linked less to scooter volumes and more to progress on in-house cell development. The company has indicated that its Lithium Iron Phosphate (LFP) cells are ready for deployment, with integration across mobility and energy storage applications expected from the next quarter.
“The new 46100 format LFP cell is bigger than the current NMC 4680 Bharat Cell and represents a step change in scale, cost efficiency, and applicability across both mobility and energy storage solutions,” Ola Electric said.
What do analysts say?
Analysts see the move as part of a broader effort to address cost structures. Battery packs account for 40–45% of an electric vehicle’s cost, making chemistry choices central to margins.
“LFP batteries offer advantages such as better thermal stability, and relatively more durability and safety and are cheaper compared to NMC cells,” said Anand Kulkarni, director, Crisil Ratings. He added that cathodes contribute 20–30% of battery pack costs, and the use of lower-cost iron-phosphate materials makes LFP a more economical option.
Improvement in reported margins
The shift comes alongside an improvement in reported margins. In the third quarter of FY26, Ola Electric’s consolidated gross margin rose to 34.3% from 18.6% a year earlier. While the company has cited operating measures such as store rationalisation and workforce reduction, it has also attributed gains to the use of its in-house 4680 Bharat cells.
“The introduction of LFP chemistry is expected to unlock further reductions in vehicle cost and accelerate EV adoption by making electric mobility more accessible,” the company said. There are trade-offs. LFP chemistry typically delivers lower energy density than Nickel Manganese Cobalt (NMC) batteries, which affects range and weight.
“LFP chemistry typically has lower energy density, but higher cycle life and better performance with higher ambient temperatures. NMC typically provides higher energy density or more range for the same weight and volume for two wheeler applications,” said Bharath Rao, CEO and Co-Founder of Emobi.
Kulkarni said that NMC batteries offer energy density of 150–250 kWh/kg, compared with 100–150 kWh/kg for LFP.
Execution remains a constraint. The company needs to sustain monthly sales of about 15,000 units to break even. Registrations rose to 10,117 units in March from 3,973 in February, though current month sales at 8,271 units have been supported by discounts.