Hello, good evening. Henderson Family Hello, good evening. Henderson Family Office, right? Family office, okay. Ola Call? Hello? Which call would you like to join, sir? Okay. The conference is now being recorded. She has a home and at price points, which are now very, very competitive. Then what is it that is the stumbling block on the adoption? What is it that you pick up from ground? Is it still no confidence in the product performance, or some thoughts around that? See, like I always remark, Gunjan, the six and a half needs to be split into motorbikes and scooters. Motorbikes are 2/3 of the market, and there is no product there. Ours is the first product there. So let's keep aside motorbikes. In scooters, the penetration has been growing steadily. Right now, the EV penetration in scooters will be slightly higher than 20%. And if you see, we've put a chart in our market commentary in the shareholders' letter that shows that actually, quarter on quarter, with a few blips here and there, the EV market is growing. And if you take, see, sometimes what happens is we see only this month versus two months ago. There are enough seasonalities. There are enough seasonal changes in amounts and all that keep moving it a few points up and down on a monthly level. But if you zoom out, you see year on year, calendar year 2024 over calendar year 2023, the scooter EV penetration has gone up from about 12%-13% to about 17%-20%. And we are seeing continuous similar trends of penetration increase in scooters. So my feeling is in calendar year 2025, we will go from about a 20% to about a 25%-30% penetration. This number can be slightly higher, slightly lower, depending on how competitors also play. If competitors are more aggressive, it actually benefits penetration. And hence, in a strategic sense, it benefits us because we have the strongest play in electric. As we have expanded distribution for the first time, actually, these customers have a good product at a reasonable price. Before that, they had our peer products, which were maybe not priced well or not as good in terms of functionality. And our distribution expansion will further increase scooter EV penetration. So anywhere between 25%-30% is where, I think, towards the end of this year, we can be. But there's another blip possible because subsidy is reducing in April from INR 10,000-INR 5,000. There might be, again, a two, three-month blip because of that. But generally, on a year-on-year basis, you should assume EV penetration growth of about 5-10 points, 5-10 percentage points. Thank you. On the other hand, I'll just complete my answer. That was scooter commentary. On motorcycles, we actually expect a faster uptake compared to the scooter journey. The scooter journey, if you see, started three and a half years ago with us. Then penetration was sub 1% in scooters. Now it is 20%. It's taken three and a half years to get here. In motorbikes, we actually expect to traverse the same journey in about half or two-thirds of the time, and that's because there's generally more awareness about EVs. The basic foundations of the sales, service, network have already been laid out. Products have already improved three generations for us. Our motorcycles start from our Gen 3 platform. So all of those benefits already are into the starting point of motorcycles, and motorcycles, as we all know, is about two times the scooter market. So we are actually very encouraged by the response and interest we are getting on our motorbikes. And we actually feel this is going to be the real inflection point for the EV, two-wheeler, three-wheeler industry in India, which is motorbikes gaining EV penetration. And it's all going to happen in the next couple of quarters. Okay. Got it. That's pretty useful. I think this last question, if I can squeeze in, Harish, I just wanted to get your thoughts on this. OpEx, which has been seeing a pretty big jump over the last two quarters. And last quarter, you did speak about the warranty cost being higher. And this quarter, again, that number has gone up. So if you can give us some sense on what's really driving the increase there, both in terms of where are we on warranty costs, and secondly, what's led to the step-up in this quarter? Gunjan, I'll set some context, and then Harish can be more specific on it. See, on warranty, the warranty and service-related costs, you see a one-time exceptional cost in Q3. There will also be another one in Q4. This is largely linked to the service backlogs we had. It is not all warranty. Part of it is also a no-questions-asked goodwill that we did, given that we had a bad issue on service. All of that is now behind us. In terms of actual warranty cost in the product, we so far book about 3,200, Harish, right, per product? 3,250. 3,250. Now, we might revise this number in the next financial year, as we just learned from our experience. The steady-state actual warranty costs for us are not much higher than this INR 3,200 number. Slightly higher, but not much higher. It is the one-offs, which we had to solve for, which was linked to lower network scale and some goodwill that we had to do. So this should end in the next quarter or two in one-offs. And going forward, we might revise our provisioning on warranty to the new level from this data. Just to add, Gunjan, I think if you look at an annualized level, last year we had a warranty cost of approximately 5%-6% of our revenue. This year will be slightly higher, running into the close of this year consequent to this one-off. And the last two quarters went into Q4, some part of it. But going ahead into FY 2026, as we review our provisions and with Gen 3 and other technology improvements, and with our investment and service side of it, these are expected to then start trending closer to the industry standard. Actually, on that, with our Gen 3 platform, our forecast actually is that the warranty as a percentage of revenue might be around 2%. That's what we have tested for and planned for, and that's where Gen 3 is coming out in the testing also, so we've done a lot of work on making sure Gen 3 is actually much lower on warranty costs. So 2% is where we are targeting with Gen 3. We might actually be slightly lower on that too, but we will still have a lot of these Gen 2, Gen 1 products, which will continue to have some level of warranty higher than this 2.5%, so the blended might be slightly higher for another year or two. Thank you. Next question is from Chandramouli Muthiah from Goldman Sachs. Please go ahead. Hi, good evening, and thanks for taking my question. I have two questions, and I'll ask them upfront. First one is just around the motorcycle launch conversations on that. Just want to understand at what stage will you potentially start sharing the teaser numbers so we can get the commentary on the motorcycle product? And the second question is just around your battery strategy. What sort of yields are we at this stage as we approach the June sort of in-house battery usage in some of our products? And when do we expect the battery strategy to be accretive to our gross margin profile versus buying cells externally? Thank you. So on motorcycles, Chandramouli, we've had a very strong response to our launches. We are actually, across all our stores now, people are buying the motorcycles. We will not be sharing any numbers today. Many people are also saying they've reserved it. Tens of thousands of people have reserved the bike, but they want to see the bike in the stores before they finally order, which will also happen in the month of March. So motorcycles, actually, in terms of volumes, will start reflecting in Q1 in a material way in our registrations as well as our revenues. There will be some in this quarter, which will be towards the end of March. But in terms of volumes and revenue and registrations, it will come in in Q1. But the interest is very, very strong. The product proposition also is obviously as good as it gets in EVs for this category. That's on motorbikes. What we've launched right now is the Roadster X, which is the entry-level motorbikes. We have a bunch of other motorcycle products lined up for the course of this year. We have the Roadster, then the Roadster Pro and Diamondhead, which are sporty mid-segment bikes. Then later this year, we will have our premium segment bikes also. All of that is lined up. We feel fairly good and confident about our motorcycle product lineup. On the battery, see, we are right now scaling up the entire production. Our yields are already up to about 70%-odd and we want to get to about 80+% when we commence production next quarter. Each of these steps are being optimized for the right yield and as well as the right safety, quality, etc. All the testing that we're doing on the cells is to make sure whatever we are producing is at a certain safety standard. Also, the yields and the cost is also trending towards a high yield number. We will start our commercialization at around 80% yield and, through the course of this year, get it to about 90% odd. The target eventually is a mid-90%s, where the best-in-class Giga factories run in the world, which will be somewhere early to mid next year. In terms of margins, at a BOM cost level, the cell is going to be on day one cheaper than buying it from outside. The BOM cost of the cell, as well as the cost of production for us, including yield also, from the first quarter of commercial production itself, will be lesser than the cost of procuring cells from outside. As we improve yields, as we get to a higher scale, our BOM and the cost of production of the cell will further reduce. At about a 5 GWh level, the cell business will be also segment EBITDA positive, directionally, about a 5 GWh scale, which should happen by early next year. That's where the cell business will be at a consolidated level, EBITDA margin of return. At a contribution margin, etc., it might happen earlier. Got it. Thank you very much, and all the best. Another point, Chandramouli, I want to make here is I don't know whether you all noticed that it was a small line in the end of our shareholders' letter, but what we are producing right now in the Gigaf actory is the Gen 1, Ola Gen 1 NMC cell. We are already working on our Gen 2 NMC cell, which will be out early next year. So that will be a better energy density than what we have with this one. This one is about a 275 Wh/kg mark. That one will be slightly higher, which actually means every product of ours just gets 10% extra or 5%- 10% extra energy right out of the box without the vehicle changing anything. Another big thing here, which was, again, a small point maybe you guys missed it, is we've also started commercializing LFP cells. So we are making two LFP cells, one for our vehicles on the same 4680 format and one for battery storage application. And we will be entering the battery storage industry also with a mega pack kind of a product, which will be a container-sized battery. And in India, the battery storage market with all the government bids and all is just starting to ramp up. And we actually, today, all the players in India import from outside. So we will be building these container-scale batteries within this calendar year through our own LFP cells, fully vertically integrated, and selling it to all these EPC companies instead of procuring from China. They can buy from us. Got it. That's helpful. I'll fall back into this. Thank you. Next question is from Rishi Vora from Kotak Securities. Please go ahead. Hi. Thank you for the opportunity. My first question is just a clarification. Harish, you made a comment that by early next year, you expect the Gigaf actory production to reach 5 GWh, right? Is that correct? Yes. So essentially, what you are implying is that we'll roughly produce around 1.5 million vehicles. And if you look at current rate, we are legit roughly around 400,000-500,000 vehicles. So what you're implying is we'll 3x our volumes in one year? No, I'm not implying that. Let me unpack this for you, Rishi. There are two or three things here. First thing, we will have installed capacity of five or above GWh in the Gigaf actory, and the factory can produce that much. Second is how much automotive volumes will we have? From our two-wheeler business, we do expect getting last year was 400,000 GWh. Now, this year, we are seeing again a bump in volumes, turnaround of our volumes, motorcycles, etc. So maybe that 400,000 GWh will through this year become 500,000 GWh, 600,000 GWh, 700,000 GWh in that zone. I don't want to give a concrete forecast on that, but I do expect strong two-wheeler volume growth this year, and on top of that, we have our three-wheelers coming towards the second half of this year, which will actually have much higher battery capacity. All in all, let's say we have about 700,000 GWh-800,000 GWh kind of volumes towards run rate basis towards the end of this year. That means if I use a factor of 4 kWh-5 kWh p er product, so that will be about a 3 GWh-3.5 GWh requirement by end of this year or early next year. Our Gigaf actory will be ready to produce all of that. Then on top of this, we will also, like I mentioned, be making LFP cells for battery energy storage. There will be a new segment that we will start working towards in the next maybe in the next quarter or so. You'll start hearing more about it from us, which is this container-scale battery. So now that, again, is an early market in India, but we will have the capacity in our Gigaf actory to supply for that as a market scale growth. Have we started discussion with the customers for this LFP factory? Or maybe you'll start from next quarter? No, we've started some discussions. I don't want to share specifics today, but there are many discussions, and we are also really, from an engineering standpoint, the containerized battery is also being made, and discussions are being had with all types of customers across the value chain. Understood. And if we look at keeping aside the market share trends, which has been volatile, our absolute volumes in 3Q were down almost 3% roughly. And even in January, the absolute volumes are around 25,000. So despite us having in the scooter segment all the offerings across majority of the price points, now what is it that is not resulting in the sharp uptick in volumes because now TCO is favorable? Everything is there. Why we are still for the industry and for us, the volumes are not significantly scaling up despite all the positives in terms of pricing, product availability, and distribution? See, you'll have to give it some time, Rishi. We just expanded our distribution. Till then, we were only at about 750 stores. We've just expanded to be able to address almost every part of India. And it'll take four, five months for that distribution to mature. And as that matures, you will see our volumes rise in those hinterland markets or new markets. Secondly, there is definitely higher competition. So while the market has grown, the top three players are kind of fighting aggressively for it. The other two are losing money in their fight. We are actually growing our gross margin, expanding our gross margin. So part of that competitive intensity also reflects in our market share. Market share in January was about 25%-26%. And like I've guided before in this call, we will aim to have a scooter EV market share of about 35%-40%. We believe we can get there with our Gen 3 products as well as Gen 2 coexisting. The network expansion that we've done, as well as the service issues that we have now solved and the brand image that had been that the issue that was there, actually customer expectation, customer anecdotal feedback is all very positive now. That also we expect a positive tailwind to increase our market share. Expect our scooter EV market share to be around 30%-35%. The rate of growth of EV in scooter, like I said, right now penetration is 20%. It might get to 30% by the end of this year. That means if we have one-third of that market, we'll have 10% of the overall scooter market. That's how we are looking to play. The Gross Margin headroom that we have allows us to be more aggressive if competition is throwing money, and that's how we've been able to expand margins as well as expand market share. Understood. And just one last question for Harish. What would be the cash outflow during this quarter, and what would be the net cash on our balance sheet at the end of December? In the course of this quarter, you've seen the EBITDA numbers in that. The overall cash balance at the end of the quarter would be around INR 5,000 crore+ at the balance sheet at our end. That will be the cash in hand at the end of the quarter. As in, what would be the net cash number? Net cash number would be around 8%-10% lower because of certain cash which are blocked in terms of bank guarantees, etc. That would be the net cash. Understood. Okay. Thank you. Next question is from Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah, hi. Harish, my question pertains to our product quality, so we have addressed our service quality quite considerably in the last few months. However, given we have several new product launches lined up between current month and 2Q and beyond, what are we doing to ensure that there are no teething troubles with our upcoming product launches and denting our brand equity? See, the Gen 3 platform, like I mentioned, already improves product quality by a very large degree. And there are a bunch of things we have done on the engineering side, like moving away from hub motors. Hub motors was a major challenge in product quality before in the Gen 2 platform. Now, with Gen 3, it's all our in-house-made mid-mount motors, which are much more almost a logarithmic scale better in terms of product quality. We've also re-engineered the electronics, reduced the number of components in Gen 3. So if you see the number of ECUs are all down to largely two, one in the head unit and one in the motor controller, and one in the battery. So three. Much, much more well-integrated, lesser number of parts. That improves quality. In Gen 2, again, one of the major areas of quality issues was the motor controller where water used to leak in. And these are all not our manufactured or designed parts. This was procured from suppliers. So now we have engineered these things ourselves, integrated them better into the vehicle. So Gen 3, actually, our own estimate, like I said, is warranty as a percentage of revenue below 2%. And in addition to this engineering, we've also thoroughly tested this with the lakhs of kilometers of riding these Gen 3 prototypes and early products. And after that is only when these are coming into market. Okay. Got it. So testing trend has also been far higher than the Gen 2 in general, or? Yes, absolutely. Testing at both a vehicle level and a component level. Got it. Got it. And secondly, the staff cost has seen reduction because of moderation in the comps. But should we expect it to increase going forward given the expansion of network, or that won't be reflecting on our payrolls as such? No, the network people will reflect in our P&L. They're not on-roll for us. They're off-roll, but they do reflect in our P&L. But in terms of people cost, if you pick up on-roll people, that will actually, I don't know the specific number, but it would have reduced in Q3 over Q2, as well as Q4 over Q3 will be trending downwards. But if I even add the network people cost as a broader people umbrella cost, we will still generally hold steady because in network we are adding, but in other places, we found a lot of efficiencies to commonize roles or use AI in our business processes and really reduce. Got it. And lastly, with respect to our CapEx guidance for this year, FY 2025 and FY 2026, how much do we plan to invest in both capacity and sales? Hello? Hello? Hello? Harish, please stay connected. We seem to have lost the line for the management. Please stay connected while we reconnect with Harish. Do you want to go ahead with your question? Yes, please go ahead. Raya? Are we audible to you? Yes, sir. We can hear you. Harish Abichandani, please stay connected. Next question is from the line of Ajox Frederick. Please go ahead, Ajox. Hi, sir. Hope I'm audible. Yeah, I have a couple of questions. One is on the distribution. So how many active distribution centers do we have right now after the new expansion? Hello? Hello? Am I audible? One moment. Yeah. Hello? One moment. Harish, please stay connected. Yeah, can you guys hear? Hello? Yeah, yeah. We can hear you. Can I go ahead? Yes, Ajox, please go ahead. Sorry for the inconvenience. No problem. I thought I was asking about the distribution stores. So how many are active right now? Is it Ajox? Yeah, this is Ajox from Sundaram Mutuai. Yeah, Yeah, sir. So I wanted to understand the distribution. So what is the current status of stores open right now? And what are we focusing on? Is it tier two, tier three? And incrementally, what is the per store count we are targeting? What's our distribution strategy and status? See, we are focused on the whole breadth of the country, tier one, tier two, tier three, rural, all of those. Because as a, let's call it a multi-category general purpose OEM, we want to be across all kind of customer segments. So that's why we initially, till we announced and did this store expansion, we were only 750 stores, which was largely tier one, tier two markets. Now we are across pretty much every district and taluk of India. We don't expect us to have another store expansion in the near term. Maybe towards the end of this year or early next year. There is still another scope for adding another couple of thousand stores to get to an equal level where ICE industry is. But for now, we feel this is enough to scale up the products that we have. In terms of customer base, also, our focus is across the segment. Many of our products find resonance with different levels of customers. With our motorbikes, especially, upcountry markets, we feel will be very relevant. With our premium scooters, urban cities and slightly more upwardly mobile customers find it relevant. With our mass market scooters, it's more a broader horizontal cut across tiers. Okay, sir. We saw your expenses go up. Can you help me understand how much was spent in this network expansion cost? I'm assuming that's separate from other expenses, right? Network expansion is not another expense, Harish, right? It's a network expansion, which has happened over, say, December. And the significant cost actually will start coming in this quarter. And it will be normal rentals, etc., along with all lease, property, etc. Given the accounting standards, some of it actually goes below the EBITDA line because of the way the lease of these semis are accounted. That's the normal cost. Otherwise, incremental costs are fairly minimal on these network expansions. Okay. I was just looking at the other expenses spiking up. So I wanted to come to your end on that. On Q2 basis? Yeah. On the other expenses, which, as we discussed earlier also on the call, some of these one-offs which have been taken in this quarter towards warranty, towards the rationalization cost, etc., which is what we have taken. And that's why the spike you see in the quarter-on-quarter. Okay. Okay. Just a final question. You mentioned that Ola's gross margins are 25%. And for the last few quarters, we were hovering around 18% or 19%. So what changed in Ola to deliver a 25% gross margin? See, on Gen gross margins, there are two things. Firstly, our BOM cost has been reducing continuously. If you see, even in Q3 over Q2, we had, in our shareholders' letter, said that one point BOM cost reduction is contributing to gross margin. Same in Gen. Another one point of gross margin improvement happened through BOM cost reduction. Then, on top of that, there was about a 3.5 percentage point improvement from no discounting because last quarter was the festive quarter. So January was less intense in terms of things. But despite that, we actually gained market share back. So in that sense, we were able to gain by discounting lesser. Now, going ahead, we will see an expansion from further BOM cost reduction thanks to the Gen 3 platform, as well as margin expansion thanks to the Gen 3 and Gen 2 products coexisting. Okay. Okay. That's very clear, sir. Congrats on all this. Thank you. Thank you. Thank you. Next question is from Shirish Guthe from Nippon India Mutual Fund. Please go ahead. Hi, sir. Is it possible to share what CapEx we did in Q3 on tangibles and intangibles? The total CapEx for the quarter around in Q3 was around INR 300-odd crore, which is across both sale and auto. And the intangibles was R&D, etc., would be around INR 60 crore-INR 70 crore in that number. Hello? I think you're still talking over here. Request for you. Am I audible? Yeah. Yeah, we can hear you. Okay. So CapEx is answered. So the next question I'm trying to understand, the PLI we mentioned is now applicable on all models. So is it 12%-13% of revenue? Is that the right number to work with? Am I audible? Hello? Yeah. Yeah, we can hear you. I'm trying to understand how much PLI we have recognized in this quarter as a percentage of revenue. In this quarter, we recognized around INR 120 crores of PLI for across all our product lineup. Okay. Okay. And, sir, just wanted to get a clarification on the other income. But Q2 cash has fallen, but other income is up. Is there any exceptional gains or anything in the other income? Or is it a normal run rate that we should expect? This is fairly normalized. There is no exception item as part of the other income. Understood. Thank you very much. I'll follow that. Thank you so much. Thank you. Next question is from Nikhil Kale from Invesco. Please go ahead. Yeah. So I think thanks for the opportunity. One question on the staff side, I think you made a comment about 17% kind of an optimization. So just wanted to understand, is that kind of the workforce percentage that you have kind of reduced, or what is that number exactly? That is the cost of the workforce. A number of people. Yeah, that's the number of people we have reduced. Okay. Is it possible to highlight what work areas have kind of the major reductions been done? Is it like marketing? Sure. I'll take that up. Yeah. So a lot of these are actually broad-based, some in corporate functions also because this company grew so fast in the last three years, there were many pockets of the company that were overstaffed because we were in growth mode only. So think of this as a one-time consolidation we are doing on our costs, removing inefficiencies in terms of structures of roles, as well as, unfortunately, some people who might not be measuring up. So this is mostly on that. So across corporate functions, even in field, some in the factory. But largely, all the technology muscle, engineering muscle, manufacturing muscle is all fully intact. In fact, I would say the lean mass has gone up. Understood. Understood. And just wanted to get more clarity on the distribution model now. So when we had like 750 stores, those were all our stores, right? So now with this 4,000, I mean, where does that number stand? And now are we kind of looking closer to a dealer model? How is the distribution model now different versus when we were at 750? Sure. See, our model still has the two things. First is our own stores. We now have about 3,000 of our own stores plus partner stores, which are not dealers, but think of them as agents, partners, multi-brand outlets. So we have about 1,000 touch points through them. So that's the 4,000 total. Understood. Understood. Understood. Thank you. That's it. Thank you. Next question is from Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah. Hi. Sorry. My question was on the CapEx side. So what kind of CapEx do we expect to invest, including R&D, both in autos and sales for FY 2025 and FY 2026? So I'll give you a directional commentary on that, Jinesh. I'll start with the cell. So the cell CapEx, for the 1.5 GWh, which is phase 1A, that's all largely invested. Maybe some tail end part of that is continuing in terms of cash flows. We will expand to 5 GWh and that CapEx investment will come into FY 2026. Now, that would mean about, let's say, maybe INR 500crore-INR 1,000 crores thereabouts, right? The final negotiations are still happening, but thereabouts in terms of CapEx, closer to 1,000 for the cell expansion. On the auto side, we will expand our factory as all these new products come in. Our factory production currently is about a million units a year. But as we are bringing the 4680 cell, we will expand towards the 4680 battery pack investments, as well as take that 1 million upwards to 2 million- 3 million, especially as we bring our three-wheeler products online. So that will have some CapEx, again, in the INR 500-odd crore number, maybe slightly higher through the year. Some of these will be actually backloaded in FY 2026, not in FY 2025. On top of this, the final intangible CapEx is the R&D. R&D continues at the same rate at which we are doing right now. No major changes there. Maybe incrementally, it will keep going as our revenue grows. Got it. Got it. And with respect to, as you mentioned about warranty costs at three to 50, what was that you're referring to? Just a clarification on that. See, 3%-5% is the warranty provision we take right now on every product that we sell. But the actual cost per unit per year was higher because of these one-time warranty and goodwill actions that we had to do last quarter. Going ahead, we are forecasting that with Gen 3 products, we might actually end up being lower than the 3%-5%, closer to around 2% of product value as provision. And maybe for the current products, we might revise the current provisions upwards once we finish the financial year. Got it. Got it. That's all from my side. Thanks. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to Mr. Chauhan for closing comments. Thank you. We appreciate your time and all of your questions during the call today. Thank you so much for joining us, and we look forward to meeting you all during our next earnings conference. Thank you. Have a good day. Thank you very much. On behalf of Ola Electric, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your line.