(Reuters) – India’s Ola Electric has managed to save 900 million rupees ($10.3 million) a month from a cost-cutting programme it began in November, the electric scooter maker said on Wednesday.
Since making its splashy stock market debut last August, Ola Electric has been hit with a spate of blows ranging from falling sales to heightened regulatory scrutiny. It has cut jobs at least twice since November, according to media reports, and has been working on re-shaping its sales and service networks, reducing operating costs and bringing down inventory.
Ola Electric, in which the SoftBank Group has a significant stake, reported a wider quarterly loss of 5.64 billion rupees in the October-December quarter as it offered heavy discounts to lure customers and spent money to improve the speed and quality of service at its workshops.
It said its average quarterly operating expenses should drop about 40% to 1.1 billion rupees in the first quarter as a result of the cost-cutting programme, compared to 1.78 billion rupees in the third quarter.
The Bengaluru-based company, which is trying to make its own EV battery as part of a government-subsidised manufacturing scheme, also expects the measures to also help it report a break-even EBITDA (earnings before interest, taxes, depreciation and amortisation).
Ola Electric’s founder and chairman Bhavish Aggarwal said last month in an earnings call that his firm would need to sell about 50,000 units a month to reach the milestone.
The company sold 24,377 units in January and 8,646 units last month, according to government data. The sharp slide in February’s sales was due to a renegotiation of its contracts with its vehicle registration agencies, the company said.
($1 = 87.2150 Indian rupees)
(This story has been refiled to fix a typo in the last paragraph)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Janane Venkatraman)
