Ola Electric's Market Cap Soars with New Scooter for Delivery Workers
Ola Electric Mobility Ltd. witnessed a significant boost in its market capitalization, gaining $1 billion in just two days following the unveiling of its new electric scooter specifically designed for delivery workers. This surge in value was driven by a 29% jump in shares through Thursday, fueled by the company's strategic move to tap into the burgeoning demand from India's gig economy workforce.
The Ola Gig, priced at ₹39,999, caters to the needs of quick commerce workers by being optimized for shorter delivery trips. Additionally, Ola introduced a revamped S1 scooter targeting urban riders, including young professionals, students, women, and elderly users. Both products align with Ola's mission to "democratize electric mobility" in India.
Despite recent challenges faced by the company, including share price pressures following its August debut and rising consumer complaints, Ola's ambitious expansion plans have instilled optimism among analysts. Citigroup initiated a "buy" recommendation this week, with Goldman Sachs and HSBC maintaining similar ratings. While shares remain over 35% below their peak, they are gaining momentum with renewed investor confidence.
Ola's vision extends beyond solidifying its leadership in India's EV market. The company aims to expand globally, with plans to roll out 20 new products over the next two years, including motorcycles and three-wheelers targeting both mass and premium segments. Deliveries of its Roadster motorcycle series are set to begin in March 2025.
Ola's Gen 3 platform, operational by January 2025, is projected to reduce material costs by 20%, enabling more cost-efficient production. Innovations such as structural batteries and magnet-less motors are expected to enhance performance and reduce warranty costs.
Furthermore, Ola is actively expanding its distribution network, increasing company-owned stores from 782 to 2,000 by March 2025 and expanding service points to over 10,000 by 2025 through a network partner program. Trial production of in-house lithium-ion cells has already commenced, with commercial deployment planned for FY26, aiming to reduce reliance on suppliers and improve margins. Long-term gross margins are expected to exceed 30%, even as subsidies decline.