Ola Electric is closing its company-owned stores to shift toward an independent dealer model. Founder Bhavish Aggarwal said, "Demand is no longer our constraint," despite registration figures that fell 19.5% compared with the previous year. The company stopped direct orders on November 1 and plans to expand its dealer network.

Ola Electric's Bhavish Aggarwal has another explanation for his company's struggling electric scooter business. This time, he believes independent dealers can transform its fortunes.

The company is abandoning direct sales through its own stores. Instead, dealer partners will handle vehicle sales and distribution. Bhavish Aggarwal insists that customer demand is not the problem.

"Demand is no longer our constraint," he reiterated during Thursday's earnings call.

However, the company's registration figures tell a different story.

Ola Electric registered 41,653 vehicles during the July-September quarter of FY27. This represented a 19.5% decline compared with the previous year. Registrations also fell 5.3% sequentially.

Despite these numbers, Ola maintains that demand exceeds available supply. The company blames production limitations and supplier delays for its difficulties. Its latest strategy places considerable responsibility on independent dealers.

"With low auto debt, a healthy gross margin and cost structure, and a much-improved working capital cycle under the dealer model, we expect auto to generate free cash flow in the near term," the company said.

Ola stopped accepting orders through its direct-to-consumer stores on November 1. Most company-owned outlets are expected to close by December. The company appointed 255 dealer partners operating 319 stores by November 8.

It plans to increase this network to approximately 450 stores by December. The target rises to 700 stores by March 2027. Ola claims dealers are generating repeat orders and improving sales. However, whether this strategy can reverse the decline in registrations remains uncertain.

The dealer-led transition could reduce operating expenses by another ₹50 crore. Ola reported consolidated operating expenses of ₹369 crore during Q2. The previous quarter's comparable figure stood at ₹390 crore.

Total borrowings declined from ₹3,132 crore in December 2024 to ₹1,819 crore in September 2026. Automotive borrowings also dropped significantly during this period.

The company expects its automotive business to generate free cash flow soon. However, the supplied information provides no details about fresh fundraising plans.

Meanwhile, charger shortages delayed around 5,000 September vehicle deliveries into October. Ola also claims it has accumulated paid orders awaiting delivery. The company hopes increased production will clear this backlog.

Its battery manufacturing operations represent another potential growth opportunity. Ola has commissioned six gigawatt-hours of cell manufacturing capacity. It expects to integrate locally manufactured LFP cells into vehicles from Q4 FY27.

For now, Aggarwal's recovery strategy depends heavily on dealers delivering stronger sales. The challenge is proving that demand exists despite falling vehicle registrations.