Ladies and gentlemen, good day, and welcome to the Ola Electric Q1 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing Star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Chauhan from Ola Electric. Thank you, and over to you, sir. Thank you. Ladies and gentlemen, we are pleased to welcome you all to Ola Electric's first earnings call, where we discuss its financial results for the quarter 1 of the financial year 2025. From Ola's management today, we have Mr. Bhavish Aggarwal, the Founder, Chairman, and Managing Director, along with Mr. Harish Abichandani, the Chief Financial Officer. I now hand over the conference to Mr. Bhavish Aggarwal. Thank you, and over to you. All right. Hello, everybody. This is our first earnings call as a public company, so we're all very excited about sharing updates with all of you. I'm just looking at the names. Looks like some people that I also know. Good to see all of you. We've released a press release. We put up the statutory financials, and we've also put out a presentation on our website. I will just walk you through some thematic updates, and then happy to do Q&A at the end of it. If you see some key metrics for this quarter. Overall, this quarter has actually been an important quarter in terms of both growth as well as profitability, as well as some key initiatives that have continued to mature well. Key metrics, if you look at our total income, we had INR 1,718 crore in this quarter. It's the highest level, year-on-year, about 24% growth. We had a good number of deliveries, 1.25 lakh through the quarter, a 77% growth over last year. Adjusted gross margins were about 21.94%. Again, about 873 basis points higher, year-over-year. This quarter also, you know, we had a very good market share performance. Almost one in two electric two-wheelers sold in India was an Ola vehicle, 48.6%. And our EBITDA margin also, consolidated EBITDA margin, went up from, went up to -7.6%, about a 660 basis points improvement. Now, this quarter onwards, and this is the first quarter results that we are publishing, we have also started showing a segment view of our business. There are two segments. Obviously, we show the consolidated view. We continue to show that, but we have the automotive segment and the sales segment. In our discussions with many of you analysts through the process, we realized that people wanted to understand the two types of businesses separately. So we decided to share more information with all of you, so that you can see the health of each individual business. And I'm actually very happy to share with you the numbers on the automotive segment. If you see the financials, we have made significant EBITDA improvements there. Segment EBITDA. Our segment EBITDA is now negative 2%, which is just on the cusp of a positive point, and this has improved, I think, quarter-on-quarter, about 7 percentage points. Some key operating highlights. Firstly, on growth, like I mentioned, we have a strong market share in this quarter, 49%. Market share numbers will move up and down through the next few quarters as the industry evolves. But another good sign is our overall volumes continue to grow, our highest ever volumes. And a very important point that I want to share with all of you is, while the volumes have grown, we have also grown both the category of products, the premium products and the mass market products. Mass market is roughly what you would think of as sub INR 1 lakh products. In our data, we have the numbers of premium deliveries, as well as the mass market deliveries. So you'll see the split of that. And you'll see that while our mass market scooters have grown, our premium has also continued to remain steady and actually slightly inch up. So that's a, that's a sign of a deepening penetration in the market. Our mass market products are reaching out to parts of the country, up-country markets, et cetera, where probably the premium products were slightly costlier for the consumers. It also, like I said, shows a growing industry penetration. If you look at July, which is the latest month, right after this quarter, the numbers are published through the Vahan portal. The e-two-wheeler industry penetration grew to about 7.4% in July. This is across all categories of two-wheelers. And within scooters, the penetration has gone to 21% in July. So almost higher than one in five, scooters sold in the country now is electric. And actually, there are 9 key states, which include big states like Maharashtra, Karnataka and UP, where the scooter electric penetration is now upwards of 30%, which is a very important milestone. One in three scooters almost is an electric scooter there. And like I mentioned, with our mass market portfolio, we are seeing an early uptick in upcountry, tier 3, tier 4 markets also. On the theme of growth, one important point I want to highlight to everybody on this call is that, we are launching our motorcycle portfolio tomorrow. Tomorrow is our annual product launch event, fifteenth August, India's Independence Day. But I would like to share some highlights with all of you today, and, remaining, you'll have to see the event tomorrow. But we are launching a portfolio of two motorcycles across premium and mass market categories, and these will be available for delivery soon enough within this financial year. So, the remaining details you will see tomorrow. But this week, we believe the next big frontier for EV penetration and EV growth in India is going to be the motorbikes. As many of you would know, motorbikes account for about two-thirds of the Indian two-wheeler market. So it's a very important step that this company is undertaking, and we, we have, you know, a bunch of announcements in more detail lined up for this tomorrow. Now, moving on from the theme of growth into profitability, there are two highlights here I would like to give you. The adjusted gross margins of the company have improved quad- both quarter-over-quarter and year-over-year. This is, by the way, despite a reduction in FAME subsidy in this quarter, in this quarter, since I think through the last year. Our gross margins have improved because primarily our Gen 2 platform, which we had announced in August last year, and then through the last 6-8 months, it has ramped up production. With the latest being the S1 X products, which came into deliveries only in this quarter, Q1 of FY 25. So with the Gen 2, we've been able to reduce our BOM cost, and as a result, you see the improvements in adjusted gross margins. In addition to that, we've also seen an improvement in overall EBITDA margins, almost 670 basis points. Specifically, within that, the automotive segment, which is perhaps the large part of this company right now, is almost EBITDA breakeven. We've done this by we've reduced some part of our direct and indirect cost structure beyond the vehicle BOM. We've also used some technology around AI and digitization to reduce our distribution costs. Moving ahead into some key operating highlights, specifically around the cell, which has been one of the areas of interest for many of you. I'm happy to announce and share that the Phase 1A of the Gigafactory was completed by the end of March 2024. That was 1.4 gigawatt hour, and now we are producing cells. We've produced more than 30,000 cells since then already and ramping up month by month. These cells will get integrated into our products by Q1 of FY 2026. That is an important milestone because that will help both profitability as well as getting critical mass for our cell Gigafactory to further then in the future, expand into adjacencies like energy storage and et cetera. Another important milestone that we crossed in this quarter for our cell segment was that we received the BIS certification in May. BIS certification is an important milestone in getting the cells production ready and certifying all the key specifications of the cell. You also see in the presentation, if you guys have that, a very nice visual of our cell and some key specs. The fact that it is 5x energy than a 2170 format cell, which we use right now, and most companies use that in their vehicles. We get longer range in this cell vis-a-vis the current 2170 cells. And this IP has been built by this company, who is currently about more than 70 patents have been filed in the engineering and production of this cell. Now those are some operating highlights. Just to summarize it for all of you, important progress on growth with our best market share, highest volume, highest revenue improvements year-on-year, as well as very important progress this quarter on profitability due to our Gen 2 platform coming to maturity, S1 X launching, that's leading to penetration. And both adjusted gross margins and EBITDA margins reaching to improved levels. And specifically, automotive segment EBITDA margins are getting to almost breakeven. So with that, I think, I will end my remarks. There are in the presentation, some financials, consolidated and, which I have not covered, which, I will leave for you guys to, look at. Now, Harish and I are happy to answer any, any questions you have. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. The first question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead. Chandramouli, the line for you has been unmuted. You may proceed with your question. Yeah. As there's no response from the current participant, we will move to the next question, which will be from the line of Gunjan from Bank of America. Please go ahead. Yeah. Hi, thanks, thanks, team, for taking my questions, and congratulations on the, listing. I also you should mention that it's good to have the segmental reporting. You know, this is something that, you know, was very much on top of our mind, because otherwise we can't assess the difference between the auto and the, battery business, profitability. So, you know, it's nice to have that, and I hope that continues through. Now, two questions. You know, firstly, on the, the margin side, could you also help us understand how does the margin, gross margin profile stand? When these subsidies, you know, ex, ex of subsidies, both PLI as well as EMPS? Hmm. Sure, Gunjan. Good to have you here, Gunjan, and we will definitely, you know, our goal is providing the segmented financial risks so that all of you can understand the business in more granularity. And as you can see, the automotive business is actually obviously, you know, in a decent shape. Now, if I on the margin, if you think of the two subsidies, one is FAME and one is Auto PLI. We don't yet approve anything from the cell PLI, which is the other PLI we are part of. The FAME is FAME subsidy is about INR 10,000 a vehicle, maybe INR 1,000 here and there for this quarter. Given that this quarter was the changeover from FAME to EMPS, and there was some old backup, maybe 11,000 or so, that that's where it would be. So that would be about 8-10 points of margin there, right. And then PLI, we are recognizing right now for our S1 Pro and Air, not S1 X. So what we recognize there, whatever which your product gets it, I think Harish question is about 13 13% of it. So so you would assume maybe on 50-55% of revenue, you'll get 13%. Yeah. Okay. So, fair to assume that, you know, roughly around 14%, so 8%, maybe 8%-10% on EMPS and another 6%-7% on the PLI would have accrued in this quarter? Yes. Okay. Yeah, I think actually those are the reasons. Okay, got it. And, from here on, if I just think about the margin trajectory, how, you know- Mm-hmm. What are the other cost levers, you know, from the next 12-18 months perspective, what can really kick in, in terms of either cost savings or, particularly at a time you will also have the bikes kicking in, right? So how do we think about the roadmap of the margins with new product kicking in, and anything that you can share in terms of cost improvements yet to kick in? So, on the bike specifically, Gunjan, the bike is built on the same platform as the scooter, which is the Gen 2 platform. So all the key, key aggregates like electronics and motor and the cell, cell manufacturing processes, et cetera, all are same. So the supply chains are all the same. Hence, the bike starting point will be where the scooter current point is, right? So, and even on the manufacturing side, there is no real incremental CapEx installation, unless we have to increase capacity, where we are at about 1 million units small capacity right now. There'll be some small CapEx here and there, but the major CapEx will be only for capacity increase, because the same, largely the same platform. So the bike will start from a similar, cost structure on the, on the BOM cost. The pricing we will see tomorrow, so that, is the other part of the gross margin equation. On the roadmap of gross margin improvements, see, there are some... There are two or three important themes here, which I want to highlight. Firstly, the most, the big mover on gross margin will be our, the cell, which will be, like I said, to one of FY 2026, which is about, let's say, nine months away, eight, nine months away. That's when, a big change in, the gross margins will happen, because that's the next big piece of our vertical integration strategy. Till then, there are a few other incremental things on BOM costs, which are reducing through a mix of negotiations with suppliers, different supplier mix, co-location of suppliers into our EV park, which reduces the cost of supply to us, et cetera, et cetera. So through a lot of these activities, the cost keeps coming down incrementally from here to there. And then, at that point, there's a big change which happens with our own cell. Okay, got it. Just last question on the battery side, INR 1,300 is total money that you've invested. How should the... Sorry, I'm not sure if my voice is echoing, but I maybe I'll just repeat the question. On the battery investment, if you can just call out, how do we see the investment panning out? You know, 1,300 done, how much more and how phased will it be? Some thoughts around that. Yeah, hi, Gunjan. Harish here. On the cell side, you will see the segment assets in the regulatory reporting, so that's all covered there. Now, going ahead, we will, which is the Phase 1B, is under implementation, which will take us from 1.4 to 5 GWh cumulative capacity. In that context, the amount that will get invested, we already invested part of it from the term loan on that, that way will get complete around another, we have invested at most 400-500 closing that phase. So remaining money will get invested. Post that, for phase 2A, what we've raised in the IPO, which is, which will take it from 5 to 6.4, so that the INR 200-odd crore which you raised in the IPO will be invested in that. That will obviously be leveraged for further project finance to take it to 10 and beyond. Okay, got it. I'll join back with you. Thank you so much. Thank you. The next question is from the line of Rishi Vora from Kotak Securities. Please go ahead. Hi, hi, team. Thank you for taking my question, and congratulations on the IPO. Just first thing I wanted to understand, I don't know whether you shared it, I joined it a little late, but what would be the mix between premium and mass motorcycle, mass scooters, during the quarter, during the current quarter as well as the last quarter, just directionally how it has moved? ... Rishi, if you see, if you have the presentation that we've shared, you will see that in the automotive financials, page, you will see the deliveries across premium and mass. So, as you can see, premium is still fairly, so out of the 1.25 lakh, 75,000 was premium and about 49,000 or 50,000 was mass. So premium is actually holding well, and mass is continuing to grow. Last quarter, the premium was about 65,000. Mass was also 49,000. So while mass segment looks flat quarter-on-quarter, I want to share with you that the deliveries in Q4 FY 2024 were from the order backlog of Q3, because Q3 is when we launched our mass product. So you should assume that they're on an average, half of that. Mass products have grown in terms of orders, et cetera, in Q1. Understood. And, how has been the acceptance of Ola S1 X, given the price point at which it is being launched? And, you know, given, you know, your mass market motorcycle launch, in the coming quarters, how do you think the trajectory of electrification will happen within the motorcycle segment? Or do you think will it follow a similar trajectory as scooters, or will it be a faster adoption, given the learning curve from the electrification in the scooter segment? So Rishi, the first part we had actually answered in my opening comments, but just to give you a headline, we've seen that mass market products have increased penetration and have largely not cannibalized our premium products. Obviously, there will be some internal cannibalization here and there, but premium has also incrementally grown and mass has added on top of it. So mass products are doing well in up-country markets, even in urban areas, where it has helped us grow deeper into the country, the S1 X product portfolio, 2 kW, 3 kW, 4 kW. Now, moving to motorbikes. Motorbikes are built on the same platform, so the cost structure is the same, and you can directionally expect similar pricing from us for a similar eventual margin that we see in the automotive segment today. We will have to obviously see how the market responds, but we feel confident that motorcycles will have... Because it's 2/3 of the overall two-wheeler market in India, so it's a bigger market to tap into. And specifically, the mass market segment in motorbikes is also fairly utilitarian. People buy ICE motorbikes for their cost, not really for... At that price point. And maybe at a higher price point, people might buy motorbikes for other brand reasons, but at the mass segment, people buy it largely for utility and cost. And that's where I believe the EV proposition of lower cost of ownership also will cut through. I think eventually we have to see how fast the market grows. But another good thing is now compared to three years ago, when EV scooters were just new, now the overall market of two-wheeler consideration, customers have also been educated fairly well about electric. And as we bring in motorbikes, I believe that kind of education will help with a certain accelerated ramp. Understood. And just last bit on the other expenses, just on a sequential basis, you know, despite uptick in volumes, other expenses are down 12%. So, like, what has driven that decline, you know, any cost? Like, some cost, fixed costs have come down or anything which you'd like to highlight? So, I'm supposing you're referring to operating expenses in the consolidated financials. So that is, you know, there is some level of just streamlining using technology that we have done on the distribution side. We've also cut down some inefficient stores, but we might be adding that back as we add more products out there. But largely, it's a continuation of just streamlining of operations using technology. That's the one main theme I would leave you with on operating expenses. Understood. Thank you so much, and all the best. Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead. Hi, team. Can you hear me better this time? Hi, Chandramouli. Hi, hi, good evening, and thank you for taking my questions, and congratulations on the IPO. My first question is just around your longer-term vision on where you see electric two-wheeler penetration in India over the next few years. And also related to that, what you think the industry- Sure. Shall I answer that, Chandru? Sure, sir, please go ahead. Yeah. So, Chandru, I think that's an important question. Many people on this call might not have heard us in our roadshows, et cetera. So, actually, you know, if you look at ICE versus EV, there are multiple opinions, and this is a new domain for India, largely three-year-old only. There's a very important, almost like a law of physics level of a fact, that ICE vehicles keep getting costly because of emission compliance, and ICE fuels, which is petroleum or gasoline derivatives, also keep getting expensive due to macro factors. Whereas EVs will keep getting cheaper costs because of battery prices continuing to reduce through technology and supply chain innovations and scale. Electricity also, actually, our prime minister, honorable prime minister, has a vision of making electricity free with his solar rooftop. So, you know, while that's one scheme, generally electricity will, will be freely available and affordable, as we go ahead, right? So, EVs are only going to get cheaper to buy and cheaper to use. Vis-à-vis ICE cycles, they're only going to get costlier to buy and costlier to use. So this story only ends one way. Question is, when and who will, who will be the protagonist in this journey? And, we hope we are well positioned to be that. But specifically within India, these are more just technological macro things. So within India, the story for electrification, the main focus area is the two-wheeler ecosystem. Like, that's where we started our journey from three years ago. And scooters is where we have a good portfolio now, and motorbikes is where we are putting our next sight on, and we'll see very good announcements tomorrow on that. So we believe, you know, I, I wouldn't want to hazard a guess on timelines, but, generally, the penetration journey will continue with more products being announced. The cost of products continues to come lower and lower, and generally, consumer confidence in this new technology increases. And we're seeing that already anecdotally, there are people who are buying their second, third electric two, you know, scooter with Ola. There are people who are, you know, a lot of our a reasonable amount of our sales come through customer referrals. That word of mouth is strong. As you guys know, we generally don't do much advertising, so a lot of our sales is actually just word of mouth and online. Got it. That's helpful. And just as a follow-up related to that, you have been a very fast growth company over the past three years. And as you project out- Mm-hmm. -where you think electric two-wheeler sales penetration can be, what are the sort of, you know, volume growth targets that you set for yourselves? What sort of volume growth, Mm-hmm. -rates do you think the industry can do, during the next 4-5 years? Mm-hmm. -when the industry has the tailwind of PLI subsidies? If you look at penetration right now, scooters is about 20% in the previous month. And I believe that is now going to sustain and grow from here, as other competitors have also launched their sub INR 100,000 products. Whether they make money or not on that is for them to figure, but as they launch, as we launch our products, as we also, you know, tomorrow you'll see more products from us. With more products available for consumers, the consideration for e is only going up. And penetration overall 7.5%, scooters 20%. Maybe in 3, 4 years, this can be, you know, in 25, 30, 35%. Again, I don't know, the market will play out, but that's the general direction. The reason I feel confident of that is because two-wheelers in India are a mass-market product, and the lower cost of ownership is a very important proposition, and as consumers become comfortable with it, more and more people are adopting it. Now, our share in that. The market share is an outcome of multiple factors. Our focus is on obviously leading this journey as we have over the last three years. We want to focus on getting good products out in the market, being the leaders in getting good products out in the market. A vertically integrated manufacturing strategy, so that we are able to make margins and price them well for consumers in an accessible, broadly accessible way. Competition might be, you know, they might play pricing, they might want to play their margins. That's up to them. But we believe we have a strong competitive advantage coming into this because of our tech, our vertically integrated manufacturing, and our existing strong leadership. Got it. That's helpful. And lastly, just a question on other income for Harish. Just trying to understand, as part of the other income, if you could give us sort of a split between what is sort of PLI incentives in the other income you reported this quarter and what is sort of investment deals? So if you look at the segment with respect to the other income, actually, PLI is the account that's part of the total revenue itself. So PLI is not part of other income. PLI is reported and accounted under the total income. Other income has got a set of ancillary income, service income, et cetera. But PLI, as an accounting policy and acceptable policy for that, is part of the total income itself. Revenue itself. Got it. So just, just as a follow-up, so within other income, is it largely investment deals, or is there any other sort of operational items in there? Other income would include all the, you know, ancillary income, service income, handling, et cetera. This is all part of the various other components of the income. The treasury income, of course, will also be there, but that's obvious from the numbers you can figure out, but it's largely the ancillary, related product income in that. Got it. Got it. That's clear. Thank you very much, and all the best. Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead. Hi. Good evening. Thank you for taking my question. Wanted to check on the gross margin improvement that we have seen. Could you elaborate a little bit more that what has caused this, and are there more actions underway which could keep driving this. Mm-hmm. Let's say, between Q2 and Q1? And, is there any- Mm-hmm. contribution differential between the subsidies that you got in Q2 and Q1, if you could just call out that also, that what, what is subsidy element in Q2? So let me answer the first part, Kapil. See, on gross margin, the main contribution between the last quarter and this quarter, which has been going on for the last two, three quarters, is the Gen 2 platform rollout. We started with the premium products late last calendar year, and then this calendar year, especially in this quarter, Q1 quarter, we have started rolling out the mass products, S1 X+ and S1 X. So Gen 2, as you know, is a lower cost to manufacture platform, and that has helped us improve gross margins. There are some activities also, which are supplier negotiations, better supplier management, as well as some contribution to because of the lithium prices being more stable. Now, looking ahead also, generally, margins will be, like I said in my opening remarks, from here till about a year, we can assume incrementally improving. Some of that we might pass on as pricing tactically. That's a tactical call we take on a real-time basis or regional basis. But largely, the gross margins are a function of supply chain and the engineering from end-to-end activities. Rishi will answer the second part of the question. Sorry, can you repeat the question, Kapil? No, I just wanted to check. We called out that there was about, you know, 8%, PLI and 6% FAME, if I got that right, in 1Q. What were the comparable numbers in 4Q? If you look at the 4 Q numbers, the PLI we had on two products. So our S1 Air got 35 PLI in December, and 30 is broadly similar, right? Yeah, 1.2%, because FAME was higher. Yeah, FAME would have been slightly higher. Yeah. Actually, net net, the incentive of 13%-14% combined would have come down in Q1 over Q4. Yes. Yeah. Got it. So, Q1 incentive, you're saying, is lower than Q4? Because FAME reduced in Q1 over Q4, right? Understood. And just lastly, if you could also comment on... You know, we are talking about the new cells, which will start contributing from Q1 FY26. So what is the capacity of cells that we plan to start with? What and which technology they will be based on? And in, you know, in terms of EBITDA margins also, will they lead to an improvement in EBIT margins once you start cell production? That's it from my side. Sure. See, the cell production is starting Q1 FY 2026. The installed capacity right now is 1.4 GWh. That is roughly equivalent to, assume, a 3 kWh average in the vehicle. That's about 500,000 vehicles. So that's roughly our current volume today, give or take a little. So when we start integrating our cells into our vehicles, there will be a ramp-up period. Not all products will move on day one, but over a couple of quarters or so, the 4680 cells will be replacing the 2170 cells in all our existing S1 products. New products, which start after the cell production, will actually, on day one, start with the 4680 cell itself. Now, on, in terms of cell chemistry, our cells, the 4680, is actually a platform which can support multiple chemistries. The first chemistry will be an NMC chemistry, because that's what our scooters are based on. Eventually, in about, let's say, a couple of years or so from now, we will come up with the same platform with an LFP and an LMFP chemistry also. And maybe sometime in the future, we'll publish a cell chemistry roadmap from our side. Today, we don't have it published. So this platform can actually support, and that means our whole manufacturing investments can support, both type of chemistry, NMC and LFP, and their individual family derivatives like LMFP or LFP. On the EBIT margins also, if you can comment, will they also see an improvement as we start- Yes. with our sales? So, I think that's... Yeah. So let me just give you the headline on the sales, so on the financials of the sales. See, the cell costs are about 1/3 of the vehicle costs right now for us, roughly, as a rule of thumb. Now, as we look ahead into our own production, as we start producing it, we will be saving some of the margin that a global supplier like Energy or a whatever global supplier would be making on that cell, as well as there's import duty also, we will be saving that. So it will flow down into gross margins, and at a certain scale, it will flow down into EBIT margins also. That scale will be 0.4, but maybe slightly higher than that. Thank you. That's special. Thank you. And that's special. Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah, hi. Congratulations on great results. One is on, when we talk about premium products, - Sir, sorry to interrupt, but the line is not clear. We're getting an echo from the management line. Yeah, management line is not clear. You're right. Sir, I think you can proceed, sir, with your question. Uh, sorry. Okay. So, no, so I think we just separate the mic and all of that, from our side, so the echo doesn't happen. Where is the mic? Excuse me. Just flash start it again. No, so the answer to the question, I think the question is, what do we classify into premium and what product do we classify into mass? Yes. So premium is Air and Pro, and mass is X, all the variants of X and X plus. Got it. Got it. And when you are referring to PLI incentive in one case, it will be only on Pro and Air, right? Not on the X series yet. Yes. Yeah. And we've applied for the, X series also for PLI incentives, and, I think we can... We're almost maybe- Almost- Maybe this week or next week, we will, we will get it. All the certification and all is pretty much done. Yes. Yeah. ... Got it. And, we have talked about motorcycle launches, which we'll be talking about tomorrow, but, how do you see our scooter portfolio? Are there any white spaces which are still there, which we are not yet catering? How do you think from that perspective? Yes, so, if you look at the scooter market, that's a good question. This would—we have a portfolio in terms of price points, from almost INR 75,000-80,000 to almost INR 1.3-1.4 lakhs, right? So we have a broad scooter offering. In terms of style, we have largely one style. There are some style white spaces like sports or, bigger format scooters, touring scooters, et cetera. We have that in our mind, but nothing in the short term that we plan to launch. Our focus right now is motorbikes. But maybe in due course, we will make some announcements in that direction. Got it. Got it. And And lastly, can you talk about your net debt as of June and maybe currently, post listing, post IPO proceeds? As in June, our total approximate gross debt would be around $2,700-$2,800, and the gross cash in hand would be around $1,300. That is June, pre-IPO. This is all pre-IPO. This is June thirtieth data. Yeah. Sorry, June, you said? INR 3,200-INR 3,800, INR 3,300-INR 3,700. INR 2,700-INR 2,800 debt. Okay, got it. Got it. Okay, great. That's all from my side. Thanks, and all the best. Okay. Thank you. The next question is from the line of Amyn Pirani from J.P. Morgan. Please go ahead. Hi, thanks for the opportunity, and, congratulations on the listing. I had a question on, you know, the buyer of, of EVs, because you sold so many EVs. I don't know if you tracked this, but broadly, do you know as to, you know, most of your buyers, are they first-time two-wheeler buyers, or are they upgrading from a certain kind of product? You know, some insights there would be quite helpful. Is that Amyn? Yes. Yes. Amyn, so, the buyer has obviously evolved from three years ago to now. Three years ago, when the industry was, when we had just launched our first product, the S1 Pro Gen One, the buyer was largely the early adopter, the slightly younger, urban, affluent, buyer. Now, actually, because EV penetration in scooters is 20-odd%, our market share is very significant. We sell across the country. We have 700 stores across the country, so the buyer profile is now fairly diverse. With premium products like Pro, especially the Pro, which is absolutely a high-powered vehicle, higher than many 125 cc motorbikes also in terms of power and torque. That buyer is a slightly more involved buyer who may be an affluent college student or maybe a first jobber, little more urban focus in that product. As we have brought in S1 X with the 4 kWh especially, we've seen a lot of delivery riders, et cetera, in urban centers start to buy it. Another interesting nuance is, you know, when I last visited the stores, I saw a lot of women buying scooters. It was a very interesting insight that they're actually finding EVs much more convenient than petrol, because they don't have to go to petrol pumps to fill it, you know, they can charge at home. And for women, these are interesting considerations in buying vehicles. So there are some buyers I've met, again, anecdotally, that have moved from ICE, premium bikes into EVs because they find those bikes bulky for cities, but they wanted a higher powered vehicle, and they wanted an EV. So it's now a very broad spectrum, and increasing penetration into upmarket, upcountry markets also, as well as deepening penetration into urban centers like Bengaluru, where it's the, you know, it's going deeper than just the, upwardly mobile, buyer. Okay, great. That, that's helpful. Second question is on your cell usage in your own vehicles. Sorry, I think there's an echo. Sorry, I think there's an echo. Sorry about that, guys. We will control- Can I go ahead? Yes. Go ahead. Yes, please. Yeah. So you mentioned that from one to next year, our own sales in our vehicles. Now, initially when you ramp up, should we be prepared for a, maybe a negative hit on gross margin and then an improvement? Because you are mentioning that as one of the areas which will lead to, lead you to a higher gross margin, maybe over a period of time. But in the initial quarter, should we be prepared for a negative hit when that happens? See, on the gross margin level, see, firstly, actually, the reason we have shared segment with you also is so that you can appreciate the two business divisions separately, as many of you have questions across individual segments. So, the automotive, as I mentioned, will continue to incrementally improve without the sell also on gross margin. Mm-hmm. Through many, like I covered that. On the cell, at a gross margin level, I don't foresee a link to scale as much. With scale, we will improve gross margins, but the negotiated supplier BOM costs that we've gotten for our cell are fairly, competitive, I would say, compared to the procurement of the full cell. There will be a different curve on the EBITDA, consolidated EBITDA margins, because the cell will take some kind of fixed costs, and a minimum volume before the EBITDA margins start turning consolidated levels better. But it'll also be set off by the improvement in EBITDA margins on the automotive side, through this period. We are today not giving very clear timelines on when we can solve EBITDA or, or profitability breakeven happens, but actually, gross margins should see continued improvement with the cell also. EBITDA margins, there might be a twin action. Automotive continues to improve, cell might have EBITDA margins reaching to breakeven at a slightly higher volume than 1.4. Understood. If I can just ask one last question. If I look at the segmental breakup, you know, on the EBITDA level, there is a, you know, reasonably large unallocated part out of the overall EBITDA loss. So, maybe Harish can help us understand what that unallocated is. So let me actually take that, Harish, you can add if I miss anything. If you look at the unallocated, I think for Q1 it is INR 70-odd crores, INR 75 crores. Yeah. So of the overall revenue, it's about 4-odd%. So it's in- Yeah. Roughly when we analyze other companies on who report segmental and their unallocated expenses to revenue, it's roughly the median, range of, cost to revenue. Now, obviously, we have an EBITDA loss, so as a ratio of loss is high. But largely these are, you know, just for INR 25 crore a month, these are largely corporate costs, corporate teams and team, et cetera, for the corporate office costs. Okay. Understood. Thank you, and all the best. Thank you. The next question is from the line of Amit Hiranandani from SMIFS Limited. Please go ahead. Thanks, team, for the opportunity, and congratulations for showing good improvement in the operational performance. Sir, from here on, your first priority and focus will be to improve margins or to keep gaining market share? Also, sir, do you see more price cuts or price reduction post using your own manufactured cells? Amit, firstly, thank you for recognizing the improvement in markets. So you were the first one on the call, so really appreciate that. The team has worked hard to, and then, you know, the whole team, not just Harish and I present here, but the whole team has been hard. Along with on parallel, the IPO, we've been hard at work to make sure we continue to grow as well as improve the bottom line. Now, looking ahead, our focus is to deliver profitable growth. So, in terms of pricing, we will keep tactically using pricing levers, as long as our overall focus on improving profitability continues. Now, how that plays out in different markets across different products, across different times of the years, you know, some seasonal sales, et cetera, that will. Like I said, is a tactical decision for us. But the focus is to build margin or build supply chain strength through vertical integration, build technology in-house to to bring margin in-house, and pass some of that to consumers while improving the general direction of gross margins. Now, with the scale, like I mentioned in my previous comments, the gross margin will improve. How much of that we pass on to consumers, we will take a tactical call at that time. But our focus remains on profitable growth and continuing to focus on penetration with products as well as with the right pricing for the consumer. Sure, this is very helpful. Sir, my second question is basically, how much gross margin improvement one can expect once we use all our manufactured cells? And continuing with that, sir, on the cell manufacturing plant, how will be the arrangement between both the companies, at what margin sales will happen to Ola's two-wheeler? See, the sale between the companies will be an arm's length transaction, although both are subsidiaries of the parent company itself. So at a central level, obviously, it'll, you'll see the overall benefit. But it will be at an arm's length. Whatever price you'll be able to procure this sale externally from a vendor, we'll be able to, we will price it like that. What was the first part of your question, Amit? How much gross margin improvement one can expect once we see all our manufactured cells? See, on the gross margin improvement from our cell, if I just give you... I won't be sharing the specific math today, but if I give you a way to think about it, the cell is, let's say, 30%-35% of the overall vehicle cost. Globally, companies make about, let's say, companies like LG, CATL, et cetera, depending on the market, but 15%-25% margins on the cell business. And this is on global pricing. In India, the average pricing of these companies is slightly higher than the global averages, given the smaller scale of the Indian market. Now, you know, you can assume because we are manufacturing for now only for ourselves, we don't have a large corporate team in the cell business. So the margins that an external vendor makes, we will actually be able to save that at a gross margin level, soon enough. And there's a 5% duty also that India charges, so that also will be saved. So you can assume that, you know, that's a rough way to think about it, 30%-35% of the cost of the vehicle is the cell. And in the beginning, there will be a certain gross margin saving, and as we increase our scale from 1.4 to 5, further our BOM cost will reduce due to higher volume, and it will improve your gross margin savings. Yes, sir. The last question, sir. Basically, we wanted to understand more on the, you know, your export strategy, the target market, and what is your, you know, strategy for the growth over there. And secondly, lastly, the CapEx outlook, if you can give for the next three years. That's it. Thank you, sir. On the export markets, we, you know, India is actually a very strong exporter of two-wheelers to the world, and the ICE industry and kudos to them, they've actually built a very strong global profile for Indian, Indian two-wheelers. In EVs, I, I actually believe India has an opportunity to become the largest, e-two-wheeler, producer in the world, and the largest exporter of these across broadly the Global South markets, be it ASEAN or Africa or Latin America or even parts of Europe. Our focus will be these markets. We're not entering any of these markets in the absolute near term, but it is on our medium to longer term program. The CapEx outlook, sir? On the CapEx outlook, you see, primarily both the projects, both on the auto side and the cell side. Auto, we consider the capacity expansion and augmentation at the right time and raise the thresholds of our existing capacity. So that will be one CapEx right will be to occur. And the other is on the sales side, right? I think we discussed on the call that we are currently the roadmap of going up to 5 and then 5-6.4, and then 6.4-10 and beyond. These are the broadly broad areas where there will be CapEx, other than some sustained CapEx on existing campuses, et cetera. These are two areas where there will be investments, in the next 2-3 years. Okay, sir. All the best, sir. Thank you. Thank you. The next question comes from the line of Pramod Amte Pramod from InCred Capital. Please go ahead. Yeah, thanks for the opportunity. So the first question is with regard to the new, cell, which you plan to manufacture. We can certainly to see the high energy density which you are planning to pump in. But wanted to understand your thought, is it to reduce the range anxiety of the customer, or how are you looking at positioning this cell in your product line? Pramod, the cell is the heart of the EV. Just like in the ICE vehicle, the engine was the heart of the vehicle, right? The cell is a constantly evolving technology, and that's why in the last four years, we have invested a lot of time and energy and my own personal bandwidth has gone into creating this cell technology in-house, and which you see in the cylindrical cell that we've now made. The benefit of building this technology in-house is, you know, many features or performance metrics of the vehicle are controlled by the cell. For example, the range that a certain cell capacity can offer, the amount of weight that your battery pack has, the lower the better. That means the energy density of the cell matters. The charging time depends on the cell technology, not the charger. It depends on what kind of cell technology it is. And then the cost also, there's a lot of innovation in the chemistry that you can do to bring down cost of the cell. All of these, we have and also to, you know, make it more relevant from a thermodynamic perspective for the Indian market, the Indian environmental conditions. All of this we have done. So that's been our focus, and as we bring this into our product, it will definitely improve the product experience for consumers in terms of a lower weight of product and higher range, slightly faster charging time, et cetera, et cetera. And with every subsequent generation of the cell in the next few years, each of these metrics will keep inching upwards. Sure. And the second question is with regard to broadly, what's your thought process or expectation from the FAME policy, since you have been a beneficiary of the same, and with that, you have been now being able to put up a very strong foothold for the company? I'm asking you in the context that post the FAME subsidy ease-off in June, you are in good performance, and if I further dice it between premium and the mass, might be my sense is premium is already making the EBITDA break even on profits. So how do you look at FAME incentive? Should it continue? What are the benefits you would still look at going forward? Actually, that's a great point, Pramod. Again, kudos to you. You're the first person to highlight that. The premium products are obviously, you know, better compared to the mass products, fairly profitable. I would say profitable, just I will take my words. It is much better in terms of financial performance and premium, you know, the cost across the two products obviously is different. Battery sizes are different, electronics are different, but premium, we are able to price higher also and monetize them better. Profitable or not profitable, I don't want to comment on that today. I think that will be a little too much information for today. On the same point, the government has been fairly clear directionally that they will taper down the FAME subsidy over time. And already in 1.5 years, it has gone from INR 60,000 a vehicle to INR 10,000 a vehicle. So FAME is actually not that material in the larger scheme of things of the industry. I think the support is needed by the industry for another year or two, because that 10,000 is still useful, about 7, 8, 10% of the overall vehicle value. Still useful in terms of meeting the gap on profitability, but the industry is continuing to innovate, so we are continuing to innovate. So, I think even if this level of FAME support continues, the industry will continue to progress. Sure. Thanks. And the last question, if I can ask, looking at the two-wheeler industry profitability, which ranges from, the part of double digit to somehow in a higher double digit, and considering at one end, you want to be profitable, at the other end, you are on a mission to drive EV penetration, in the two-wheeler space. Where is the, ambition or balance, profitability, margin? How do you look at it, or should we look at it more on ROC basis? How do you look at the business? ... So if you look at our automotive segment EBITDA, and it's in the presentation that we also shared, you see, I'm just going to read out a few quarter numbers from, for you. Last four quarters, Q2 was negative 32%, Q3 was negative 10%, Q4 was negative 7.5%, and Q1, which is the, this quarter that we're talking about, is negative 2%. So, the, automotive EBITDA margins have consistently improved for us in a period of reducing the FAME subsidy. And, you know, this, this has been driven by, like I said, the vertical manufacturing strategy of ours, vertically integrated manufacturing strategy, as well as the, core technology development in-house of all EV-centric components. Now, these two themes will continue to continue over the next, couple of years. Long term, I believe EVs will be a very similar profitability number as ICE vehicles. Because like I said in the beginning, thematically, ICE vehicles are only getting costlier due to compliances, and EV vehicles are only getting cheaper due to the battery cost curves, the learning curves of the battery costs. So at what point does this action happen? I'm sure all you analysts have your own models. I have my own. But in the next few years, not long far out, you know, we will all be here, I believe, when it happens. We'll be here, and maybe we'll be doing a call together in the next few, you know, few years, and that would have happened. Actually, already, if I just give you some macro commentary, in China, you're seeing that happen where EVs are now cheaper than ICE vehicles. Now, China is there. This global supply chain for many of the input materials like NCM, et cetera, are common. As we scale up some of these manufacturing capabilities in India, and as we get some more scale of manufacturing of product volumes in India, I believe the same dynamic will come through in India. Sure. Thanks a lot, Rajesh. Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to Mr. Abhishek Chauhan for closing comments. Over to you, sir. Thank you so much. On behalf of Ola Electric, this concludes our conference today. Thank you so much for joining us, and you may now disconnect your lines. Thank you. Thank you. On behalf of Ola Electric, that concludes this conference. Thank you everyone for joining us. You may now disconnect your lines.