Ola Electric slashes sales targets ahead of planned IPO: Report

Ride-hailing firm Ola Electric has slashed its sales goals for 2023-2025 by more than half and delayed its target of achieving profits by a year, Reuters reported on Wednesday. The scaling back on sales goals may also be the result of the government's move to cut incentives, that pushed up the prices of e-scooter. The move comes ahead of the Bengaluru-headquartered firm's $700-million IPO (Initial public offering).

In May this year, the central government cut cash incentives for e-scooter buyers. Ola's CEO Bhavish Aggarwal said the incentive cut would be a "short-term blip" for sales, and the company said the move would "have no impact on volumes".

Reuters reported that Ola, as per its financial projections, now expects to record 300,000 e-scooter sales in the ongoing fiscal year to March 2024, two-thirds lower than the earlier goal of 882,000. The revenue target for the ongoing fiscal year is now $591 million, versus the earlier goal of $1.55 billion - a cut of about 60 per cent, the news agency reported citing an internal document.

The targets have been lowered because of the government's lower subsidy, sources told Reuters. "The new numbers had been toned down so the company is able to meet or exceed them... that is what investors want to see," they said.

In August, Ola said it aimed to double its electric vehicle manufacturing capacity. In October, the two-wheeler maker announced the closure of Rs 3,200 crore of funding as a part of its equity and debt round raised from Temasek-led investors and project debt from the State Bank of India, respectively.

The company said funds raised would be utilised towards the expansion of Ola’s EV business and setting up India's first lithium-ion cell manufacturing facility in Krishnagiri, Tamil Nadu.