Ola Electric has seen a significant surge in its stock price, gaining over 30% in just five trading days. This rapid ascent has sparked considerable interest among investors, prompting the crucial question: What should investors do now? Several factors are contributing to this rally, including Production Linked Incentive (PLI) certification for its Gen 3 scooters and potential GST reforms. However, a deeper dive reveals a more complex picture, requiring careful consideration before making any investment decisions.
Factors Fueling the Rally
The primary catalyst for the recent surge is the PLI certification granted to Ola Electric's Gen 3 scooter portfolio by the Automotive Research Association of India (ARAI). This certification makes Ola Electric eligible for incentives ranging from 13% to 18% of the sales value until 2028, significantly boosting the company's prospects and profitability. The certification covers seven models from the S1 Gen 3 lineup, representing the majority of the company's current sales.
Another factor contributing to positive investor sentiment is the buzz surrounding potential GST reforms on two-wheelers and EVs. Proposed reforms could lower the GST burden on entry-level vehicles, further incentivizing EV adoption and benefiting companies like Ola Electric.
Mixed Performance and Analyst Sentiment
Despite the recent rally, Ola Electric's stock performance in 2025 has been uneven. While the stock has gained nearly 20% in the last five trading sessions and 24% in one week, it is still down approximately 43% year-to-date and remains below its IPO issue price of ₹76. The stock is trading above its short-term and medium-term simple moving averages but remains below its 200-day SMA.
Analyst sentiment towards Ola Electric is mixed. While some analysts highlight the potential upside, cautioning that stretched valuations and weak fundamentals persist. Investment managers, including Mirae Asset Financial Group and Helios Capital Asset Management, have increased their stakes, signaling optimism. However, several sell-side analysts remain cautious; of the seven brokers tracking Ola, three have "sell" calls, and two recommend "hold". Their average target price suggests a potential 14% decline in the next 12 months, and one analyst identified resistance at ₹58-₹62, with potential upside to ₹68-₹70 if the stock closes decisively above that zone.
Challenges and Future Prospects
Ola Electric has faced several challenges, including instances of scooters catching fire and shrinking market share. In the first half of 2025, the company's sales declined by a sharp 53.2%, and in June 2025, sales were down 45% year-on-year. However, the company has shown signs of recovery, with monthly sales growing by 9.13% in June 2025 compared to May 2025. In August 2025, Ola Electric secured an 18.19% market share, climbing to the second spot in the electric two-wheeler market.
Looking ahead, Ola Electric has ambitious plans to expand its gigafactory and develop in-house cell technology. The company expects its profitability and cash flow to improve significantly in FY26, with the automotive business becoming operationally cash positive in the near term. Ola Electric is also investing in rare earth-free magnet motor segment. By 2030, experts estimate a share price between ₹299 and ₹352, driven by growth, innovation, and market expansion.
Investor Considerations
Given the current scenario, investors should carefully weigh the following factors:
Recommendation
For investors with a high-risk tolerance and a long-term investment horizon, Ola Electric may present an opportunity. The company operates in a high-growth sector and has the potential to become a dominant player in the Indian EV market. However, investors should be prepared for volatility and conduct thorough due diligence before investing. More conservative investors may prefer to wait for further evidence of sustained growth and profitability before considering Ola Electric.
