Hi, good evening. Ladies and gentlemen, good day and welcome to Ola Electric Q4 and FY 2025 earnings Hi, good evening. Ladies and gentlemen, good day and welcome to Ola Electric Q4 and FY 2025 earnings conference call. As a reminder, all participants will be on listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Before we begin, a few quick announcements for the attendees. Anything said on the call which reflects our outlook for the future or which could be construed as a forward-looking statement may involve risks and uncertainties. Such statements or comments are not a guarantee of future performance, and actual results may differ from those statements. To begin with, I would like to request Bhavish Aggarwal, Chairman and Managing Director of Ola Electric, Harish Abichandani, CFO of the company, and Ankur Aggarwal, VP and Head of Business Finance, to take you through the results. Thank you, Abhishek. Hello, everybody. Good to see everybody. This quarter is a little interesting and as well as fairly nuanced and detailed. So this is Bhavish, by the way. I am not going to make very detailed opening remarks because I'm assuming there will be a lot of questions amongst the audience about different things. I want to leave enough time for Q&A. We have also published our shareholders' letter for Q4. I'm assuming most of you would have gone through it. In a headline, it has been a quarter of major transformation for us at Ola Electric. Obviously, if you see at a headline level, revenue and margins, as we've mentioned in our shareholders' letter, came in at about INR 649 crore adjusted revenue, as well as 19.2% auto gross margin. Now, these numbers were impacted by a one-time issue with our registration process, which we had highlighted during the course of the quarter itself, and that subsequently got resolved in Q1, which is this quarter. The revenue, as we all know, we book only when we deliver, not when we sell. While sales were higher, deliveries were lower. In Q1, as a result, some of that catch-up has been completed. As that may be, revenue came in where it came in. This time for our results as a one-time activity, we are also giving a bit of an outlook for Q1 because, firstly, like I said, Q4 has been a bit of a complex quarter with a lot of moving parts. Hence, we know that people have many questions. Secondly, given that we are at the end of May, Q1 has anyways majorly been completed. We have a very fair understanding of where Q1 is ending up. If you look at our Q1 outlook, we are sharing a revenue forecast of INR 800 crore-INR 850 crore, about 65,000 deliveries, and a gross margin of 28%-30%, which is much higher than Q4. As we have been saying in our previous quarterly calls, our gross margin is trending upwards, especially with the introduction of our Gen3 platform. That is one of the highlights that we will talk about on our call today. Just to highlight a few things in the shareholders' letter, we have also given a detailed operational commentary on a few key topics. There are two important projects that we've been executing as part of our work over the last couple of quarters. One has been the scale-up of our network. We call that Project Vistar. It is obviously scaling up our network, but also improving cost efficiencies as well as customer experience across the front-end touchpoints of sales, service, registration, delivery for the consumer, for the customer. On that front, while in the last two quarters, we have had a bit of operational challenges, first with service and then with registrations, we've also significantly improved the bar on both. On service, for example, we have now brought our service stat down to 1.1 days, which is industry-leading, as well as on deliveries. Once the registration process was brought in-house, our delivery timelines have significantly reduced. In addition, we have expanded to about a total of 3,200 odd company-owned stores and a total of 4,000 stores where we sell. Our focus now is to increase productivity, sales productivity, as well as sales per store of these stores that we have opened up. That is the focus for this quarter, Q1, as well as the next couple of quarters. This becomes increasingly relevant as the key highlight for us in this quarter, which is our bike comes into the market. As we get our bikes into stores, we are seeing a lot of interest in the bikes from everybody. That is one of the key projects which I will be happy to answer about, which is Project Vistar. The second point, again, in the last quarter we spoke a little bit about is our Project Lakshya, which is our cost reduction project. Now, on cost reduction, we have been we had last quarter given a walk of where our cost will be. I think mid maybe a couple of months back, we had also shared an interim update in some context with the stream. We are largely on track for all those cost reductions, as you can see in the chart in that section. That savings, that benefit is already hence accruing to us in our Q1 outlook, as we have shared with you. Cost savings are on track. As a result of both the cost savings as well as our network project Vistar both together, our break-even point for our auto business segment EBITDA has now come down to almost 25,000 units from earlier what we had communicated to you. This is because the gross margin is expanding on one side and then our cost is reducing on the other side. Those are two important highlights. Another point I want to just call out is in Q4, as a one-time activity, we have increased our warranty provisions. Now, there is detail in that section over there for those of you who want to read the details. At a headline level, our Gen1 and Gen2 products, especially Gen1 products, had higher warranty costs because that was the first generation of our platform. We were in the last financial year, FY 2025, adding every quarter some kind of exceptional one-time costs. To do away with that every quarter exceptional cost, we have taken a one-time warranty provision of INR 2.5 billion in Q4. That will provide for all the warranty needs for our existing Gen1 and Gen2 vehicles for their warranty lifetime remaining. We do not expect to have any one-time exceptional costs added going ahead in the future quarters. That said, there is also another positive highlight in that our Gen2 warranty costs are roughly half of Gen1, and our Gen3 warranty costs and failure rates are roughly half of Gen2. We are seeing every subsequent iteration of our platform getting significantly better on quality and hence warranty. On Gen3, we actually feel our quality metrics are by far industry-leading. When we compare it to our own previous generations, they are, like I said, half of Gen2, and Gen2 was half of Gen1. That's another important highlight that we wanted to share on the operating level to summarize Project Vistar, which is to really bring the benefit of our direct-to-customer business model for customers as well as for our capital. Second is to really focus on getting to profitability sooner, which your company is close to achieving. Thirdly, just as a calling out of the warranty treatment. Now, while Q4 has been a tough quarter, it has been a quarter where we have had higher losses due to this one-time provisioning as well as due to lower revenues. The company's strategy and the company's fundamentals remain very, very strong. Our strategy of focusing on vertical integration remains consistent. We very strongly believe this is the winning strategy, given that globally, the only EV companies who make money, Tesla and BYD, follow a very strong vertical integration strategy. In the shareholders' letter, we have actually given some metrics for those of you interested to understand our vertical integration. If you see, the value addition on in-house engineering is now almost 90% in the Gen3 platform. That includes our own 4680 cell. Even if you see without that, it is almost 65%-66%. Very strong in-house value addition on engineering, as well as more and more in-house manufacturing of key differentiated proprietary components. That leads to a very strong gross margin advantage to us, as well as a very strong product differentiation product features advantage. Our fundamentals on strategy remain strong. We are focused on the three core strategies. Like I said, firstly, vertical integration. Second is continuing to build strong product franchises. We have communicated our product roadmap to the street in the last few quarters, and you see a nice image there in our shareholders' letter also of the future products we are envisioning. What we have done is we have actually decided to sequence out product launches to give every new product time to breathe and to grow in the market. Over the last three years, we have built a very strong S1 franchise. Even till date, we have sold almost equal to the next two OEMs put together in terms of EV scooters. S1 is maybe in this quarter, we will touch almost a million S1s delivered to customers. The next two put together is equal to us. That shows a very strong consumer franchise of S1, which is now in the third generation. Customers are loving the experience of Gen3, very strong feedback of Gen3. As a result, the franchise has broadened from three years ago when it was just one product to now where within Gen3, we have the Pro Plus, which is a premium product, the Pro, then the X Plus, and the X. We have four tiers of the product now available. Gen3 is now selling the majority of our volumes. We still have Gen2 live for those customers who see a more value proposition. S1's franchise has been established strongly. With our Project Vistar, as our network productivity, sales productivity improves, we do feel very confident of continuing to hold and gain market share. In the last quarter or two, we have lost market share as market penetration grew slower than we expected, and competitive intensity increased significantly across all levers of distribution, product, and pricing. The industry is today at a state where roughly the top three players are equal, give or take here and there a little bit. I believe the industry, the scooter EV industry, is going to enter a phase where genuine product and innovation will start winning as well as balancing on profitability and growth. We feel we are very strongly positioned on that front with the S1 franchise and our technology capabilities. The next phase for our company is to really build the Roadster franchise. We are all very excited. The bike started getting delivered late last week. We have seen very strong interest levels. You have some data on how many social media interests and the kind of impressions and the kind of engagement our content on Roadster is getting. We have a lot of queries, a lot of walk-ins in our 4,000-plus sales touchpoints. People are loving the product. If I may say so myself, it looks quite good. You can see it on the cover of the shareholder letter. The Roadster franchise is our next big focus. The Roadster franchise starts with the Roadster X, which is the mass market variant. The Roadster, as well as two more products, the Sportster and the Arrowhead, are all built on the same platform. These will come sequentially as each one gets established and scaled up in the market. That is the big focus for the company ahead in the coming quarters. We will keep sharing updates frequently on that. Finally, in the strategic priorities comes the cell project. Now, again, here we've added some more operating KPIs on yields. That has been one of the questions you all have asked us. If you see, our yields have continued to improve, and these are commercial production yields. We had said that we will bring the cell into our vehicles this quarter. Now, we have delayed that a few months because while our vehicles are ready with our own cells, we want to stabilize the Roadster as well as the Gen3 platform in the market. In that period, get the cell commercial production yields from 60-odd%- 80-odd%. As we get there, sometime in the next few months, we will start a transition of moving our own vehicles onto the 4680 cell. To summarize on that point, the cell is coming along well. The product is very stable. The vehicle is tested with our own cell. The transition to our own cell will be over the next few months. We are delaying it a bit just to make sure the operating risk or the operating profile of the auto business is first prioritized, and then we add on the cell integration to that. Finally, you have a section in the shareholders' letter on path to profitability. In that, you will see two main themes. Firstly, gross margin. As we have been highlighting, our gross margin has been going up. Q4 was roughly flat over Q3, but Q1 is looking much better already. Our outlook is about 28%-30% of gross margin. Interestingly, you will note in Q1, PLI contribution is very low because for Gen3 products, PLI is still awaited. It will come most likely in July. In Q2 of this year, our gross margin will further increase as we get the PLI benefit. As you can see, a lot of our advantage of vertical integration is starting to play out in our gross margin already from Q1 onwards. Hence, what we had shared that we expect to get to auto segment EBITDA positive within sometime in Q1, we are more or less on track on that. Maybe June, July, sometime there, we will have our auto segment EBITDA will be positive. That is what we are tracking towards. Just a final comment on auto CapEx. In FY 2025, our auto CapEx, which includes both manufacturing as well as R&D, which is capitalized, was about INR 400 crore, Harish, roughly. Yep. For For the R&D. Yes. Now, for this financial year, we do not expect any material CapEx in the auto business since the factory as well as the distribution network is all built out now. As well as on R&D, we have the S1, Gen3, as well as the Roadster platforms all engineered. So the CapEx will be more maybe between INR 150 crore-INR 200 crore only for the whole FY 2026, which includes both manufacturing as well as R&D CapEx for the auto segment. In that sense, the auto segment should see as volumes reach the 25,000 levels with the bike as well as the network scale-up, we should see profitability first and then strong operating cash flows in the auto segment. With that, I will pause and open up to questions. Thank you so much, Bhavish. We will now begin with the question and answer session. Anyone who wishes to ask a question may use the raise hand option. If you wish to remove yourself from the question queue, you may press the raise hand option once again. Participants are requested to unmute themselves before asking the question. We will now wait for a moment while the questions queue assembles. Now we take the first question from Chandramouli Muthiah of Goldman Sachs. Please unmute yourself and ask your question. Hi, good evening, and thank you for taking my questions. My first question is just on the motorcycle deliveries, which have started late last week. Just trying to understand, is this going to be a phased delivery ramp-up? I think you've shared some data points on social media engagement and so on. Similar to the kind of guidance you've given us for Q1, is there sort of an order backlog that you're able to share on the motorcycles? Just first to get some idea as to how much of a market share booster this could be in the coming months for the company. Chandru, hi, this is Bhavish. There is a bit of a phased rollout. Yes, you're correct. We are starting with, we have two models, which are the Roadster X and the Roadster X Plus. The Roadster X Plus has begun deliveries. Roadster X will begin maybe in a week or so. Even geographically, we are taking it in a sequential way because we are making sure the production and the quality ramp-up is in sync with a high bar on quality and just the level of quality the customer expects. We are making sure the ramp-up remains high quality. Hence, it'll be a little phased. There is a very strong interest level. We will not be sharing the backlog of bookings. As we are delivering the vehicles to customers, there has been very positive feedback, very strong level of interest, and frankly, a very significant increase in the walk-ins coming to the stores where the vehicles have already reached. On a day-on-day basis, we've actually been seeing a very significant part of our overall sales volumes becoming motorbike as the motorbike gets to newer and newer parts of the geography. We are also expecting the motorbike to really give us significant benefit from smaller towns and rural areas. That is where we had expanded our network to in the last quarter. With that network expansion, primarily the motorbike is the product which will be sold in those new stores which are in the smaller towns. As we all know, the motorbike is very relevant for upcountry markets. Already, the sales of motorbikes are much higher in U P for us than in Bangalore, for example. Hi, are we audible? Yeah, yeah. Thanks for that. I think I was just struggling to re-unmute myself, so that's helpful. My second question is just on the warranty costs. After this one-time INR 250 crore warranty cost that you've taken for Q4, just want to understand what would be the rough FY 2025 warranty cost as a percentage of revenue on the backward-looking basis for Gen1 and Gen2? On a forward-looking basis for FY 2026, what do you anticipate the warranty cost is likely to be after this upward shift that you've taken in your warranty policy on the Gen3 and Gen2 sales that are likely in FY 2026? See, Chandru, we won't be calling out the specific generation-wise percentage of revenue as warranty costs because the current cost, as you would imagine, is a blend of everything. Like I said, Gen3 is roughly half of Gen2, and Gen2 is roughly half of Gen1 in terms of warranty costs as a percentage of revenue. Gen1, as you can imagine now, is also coming out of the warranty period. It's a three-year warranty period, and the first products we sold were in 2022 beginning. Increasingly, Gen1 will get phased out in terms of the warranty that we are carrying. Gen2 and Gen3 will remain, and the sales are increasingly Gen3. We don't expect any more provisions to be created for Gen1 and Gen2 warranties going forward. You can do a calculation of the revenue sold and the warranty provisioned from the past history. It'll give you, let's say, a high single-digit percentage of revenue as a combination of Gen1 and Gen2. Gen3 is looking significantly better. Yet still, we have increased the provisioning for Gen3 also just to be a little conservative on warranty going forward. Got it. That's helpful. My last question is just around the EBITDA break-even guidance for the auto business. I think earlier we thought it would be a one-quarter event. I think when I just do the quick math on the numbers you've shared for one quarter, directionally, it looks like it might be on a full quarter basis, more like a two-quarter FY 2026 event. Maybe one month in one quarter or the first month of two quarters when you hit EBITDA break-even on the automotive business. Just want to understand if that understanding is fair or if there's anything else that you'd like to add there. Yes, Sir. See, the kind of variables that are easier for us to forecast are gross margins and our operating costs. Volumes are a function of market, and the market has a lot of macro as well as competitive variables which are not in a stable normalized state right now. That is why we are giving not a time horizon, let's say two quarters, one year, etc., but a volume horizon to the break-even, which is roughly 25,000 for EBITDA. Q1, as a whole quarter, you've seen our outlook. It is going to be around a negative 10% auto EBITDA margin. Like we said, Q1 has a very little amount of PLI because the Gen3 doesn't have PLI. Q2 gets the PLI as well as the bike volumes get added. It looks likely that we will cross that threshold of volumes in Q2. Got it. That's helpful. Thank you very much and all the best. Thank you. Now we take the next question from Mr. Vipul Agrawal of HSBC. Please unmute yourself and ask your question. Yeah, thank you for taking my question. First question on the back to motorcycle thing. Given the use case for motorcycle and scooters is different, how are electric bikes different from the scooter technically? Second is how is the robustness of an e-bike compared to a motorcycle? While you're focusing on the rural area most, if you can talk about that. Vipul, actually, to begin with, I would suggest I'm assuming you live in Mumbai. If you go to one of our stores, you will get to test ride our vehicle, our bike. Firsthand, you'll be able to experience the robustness as well as the strength the rider perceives when he rides the vehicle, the center of gravity, the handling, the dynamics, etc. The engineering answer to this is actually an EV motorbike is much more stable, much more robust than an ICE motorbike because you don't have the body has much stronger mass centered around the battery and the powertrain, unlike an ICE motorbike which has the engine, a lot of empty space below where the passenger sits, etc. It handles better. It has better vehicle dynamics. As well as from a robustness perspective, our engineering has been very, very thorough. We've actually crash tested our vehicle in all kinds of scenarios. We've driven it across all kinds of roads and surfaces, especially the ones that come across in rural areas. It performs actually better than ICE vehicles. In terms of range, which is one of the key criteria for a motorbike customer, a motorbike customer wants two things. He wants range, and he wants total cost of ownership even more than the scooter customer. On total cost of ownership, definitely EV beats ICE. On range, if you see, our vehicles have actually at the top end, 500 km of range, which we were able to engineer because of the technical capabilities of our team. At the upper end, 500, but even in the 4.5 kilowatt-hour, which is the medium-selling product, we have almost 250 km of rated range. Basically, from a rural perspective, normally this is the case. Normally, the roads are not that great. When you pick up riding on a fourth gear, suddenly you see a speed because something, you slow down the speed, then you pick up three guys sitting over there. You pick up in second gear, and then you can go away with the ICE bike. How will it happen in an EV? Do you have a gear system over there? I'm sorry, I'm not aware of how. Vipul, on EVs, the torque is higher, much higher. I would suggest experience it for yourself. Torque is much higher, and hence you can actually, and there are no gears. You do not need gears because normally in an ICE bike, you need gears because at low RPMs, you need higher torque, and the only way to get that is gears, right? On On an EV, you actually have high torque upfront. Customers never complain of needing a lower gear for higher torque to get out of a pothole or to get out of mud or anything. You will actually have too much torque. Understood. Understood. Thanks for that. A couple of sorry, one more question before that. On financing side, is there any subvention on interest rate given by the company? The company does not give subvention to the lenders. I presume you're talking about to the financers. We don't give any subvention. No subvention. Okay. Just a housekeeping question then. What was the share of Gen3 vehicles sold in fourth quarter? And when are you expecting PLI for Gen3 vehicles? Gen3 delivery started towards the end of Q4. In Q4, largely, it was Gen2 by deliveries. By orders, Gen3 was already majority in the month of March, I think. Q1, almost two-thirds, I guess, is now Gen3. When are you expecting the PLI? PLI will come likely in the month of July. Could move up a few weeks here and there depending on government bandwidth. Understood. Thanks for that. Thank you for your questions. Now we'll take the next question from Ajox Frederick from Sundaram Mutual Fund. Hi. Hi, sir. Thanks for the opportunity. My questions are on battery. We are delaying batteries to get better yields, right? That's the objective for delaying the batteries for our vehicles? Ajox, good question. If you see the yield number, we are above 60% already now. We can scale up production now, but that will mean more yield losses. The 60% cells that are produced are fully usable commercially sellable cells. What we are doing with the cells that we are producing is using them for rigorous testing in our vehicles. We have done a lot of testing with our S1 Pro, with our motorcycles, etc., with the 4680. We can, if we want, put our 4680 cell into our vehicles, but we are delaying it a little bit because of the yields, you said correctly, but also because the company is also right now focused on just establishing Roadster in the market and establishing Gen3 in the market. We do not want to add another change in the vehicle engineering by changing the cell right now. Next quarter, once the auto roadmap is stabilized, we will add the 4680 cell in some of the vehicle variants. Very helpful, sir. On the cost savings we will get when our cells come in, that will be on top of this 30% gross margins, right? Absolutely. This is just auto gross margin. It does not include whatever gross margin there is in cell. It is auto segment gross margin. I would like to also highlight that the net benefit of the cell will not come from day one because we have a lower scale. The net benefit on gross margin will start coming in once we hit a 5 gigawatt-hour scale of cell manufacturing, which we will get to roughly early fiscal year 2027. Got it, sir. Got it. How much CapEx are we planning for the cell this year? For the cell, there is going to be a total CapEx of about INR 1,600 crore, out of which about, you can say, INR 1,100 crore is debt financed through existing lines already, and INR 400 crore or so is equity financed. The CapEx will largely go for expanding from 1.5 gigawatt-hour currently to 5 gigawatt-hour. We have also not yet kicked off this CapEx cycle on the cell yet because we are just waiting for stabilizing yields in the 1.5 gigawatt-hour. Whether we do it, fulfill it, full-fledged action this quarter, next quarter, it is a little, we're just waiting for the final decision to kick off the full INR 1,600 crore CapEx on this. Okay. Okay. It might be so that this might be lower than the number I'm telling you. Okay. Okay. At least this year, we may get a deferred implementation of this CapEx. Yes, At least. Because our approach on cell is to get the 1.5 gigawatt-hour into production first, which is where we are, get them into our vehicles, second step, and then after that, get the vehicles on the road, and then scale up to five. It's going to be in that sequence. Okay. Okay. And what's the targeted ROC? I think it's two spoons for that, or you guys have internal? Ajox on cell, I'm assuming you're asking for the cell? Yes. Yes. Yes. Yes. Cell. Cell. Give us a quarter or so, maybe in a quarter. I can give you a number, but I would like to have much more operational depth on that when I answer you. Perfect, sir. If I give you a slightly different perspective on that, how much capital will we spend on the cell before we start making, let's say, net margin benefit to the company, to the consolidated company? This INR 1,500-INR 1,600 crore CapEx is the limit of what we will spend because that will take us to 5 gigawatt-hour, at which point making our own cell is cheaper than buying the cell from outside. Okay. Very clear. Just a final question on the vehicles for the quarter. Sir, if I do the math on premium to mass vehicles, right, the mix has probably dropped from 35%- 31%. However, the ASB dip or the average selling price dip has been much more sharper. What's causing this QOQ decline in the average selling price of the vehicle? See, the volume share of premium versus mass, like you said, is about close to 30%. The guidance we want to share with everybody there is that we will broadly reflect the industry structure there because we want to play across all the segments of EV, premium, mass, scooter, bike, right? Now, pricing in Q4 is a little bit of an outlier because of the deliveries versus orders. The deliveries are more of Gen2 vehicles in Q4, which were generally lower priced than Gen3 vehicles. Okay. Okay. Okay. Very helpful, sir. All the best for your future journey. Thank you. Thank you. Thank you so much for your questions. Now we'll take the next question from Mr. Arun Kejriwal of Kejriwal Consultancy. Please unmute yourself and ask your question. Thanks, Bhavish, for giving me this chance. Very interesting set of observations that you have made. The first question is that Q4, we had a lot of issues regulatory regarding our store launches, point of sales, etc. Is it fair to assume that whatever issues we had are now done and dusted as Q4 results are reported, or we still have some issues pending? No, sir. Thank you for that question. You are correct. Q4 had a bunch of these issues around regulatory things. Now, those are now behind us. The network expansion, we had to have trade certificates in some areas. We are now fully in touch with all agencies, all state-level RTOs to make sure we are either compliant or have already filed for the compliant, whatever we need. As well as there was one theme around our February sales numbers, which had made many people confused. There also, with all regulatory agencies, we have been properly in touch with as well as sharing all the data. From our side, we are very fully engaged as well as given whatever requests have come. There might be some further queries or news as they close their final whatever request for information, follow-ups with us. Largely from our side, we do not see any major risk to the business on these regulatory aspects. I would also like to add that last quarter has also been a quarter of important learning and introspection for us that as we have transitioned from a private to a public company, we have to also manage operating risk in a slightly more mature way. That lesson has been well learned by everybody at Ola Electric. Going forward, hence you will see us be much more deeper as well as thoughtful about capital allocation and operating risk. As a result, we've actually sequenced our capital allocation into new products as well as focused a lot more on institutionalization of operating processes, especially in the front end and the compliance and risk aspect of the business. Right. The second question is on the new number that you have given us, Bhavish, about the break-even factor. It's a very interesting number. If I do simple maths, last year, full year, we've done 359,000 scooters, which means we've crossed that threshold number of 25k that would get us to 300. Leaving aside the first quarter, is it fair to assume that we hitting in the remaining nine months, eight times out of nine, this 25k we should end the year on a positive note? Sir, absolutely. I think last year when we were doing 300,000 plus orders, the cost structure of the company, both on gross margin as well as on operating expenses, was higher. As a result, our gross margin was in the high teens or maximum 20%. As well as our operating expenses, as you see in the shareholders' letter, was almost INR 1.7 billion a month. Now, on both gross margin as well as operating expenses, the company has made significant progress. As our volumes, especially with the bike coming in, scale up beyond the 25,000 numbers that we have already achieved multiple times in the last couple of years, we expect that to translate into strong profitability. Thanks for that, Bhavish. Wishing you all the best and hoping that next quarter we have the positive news. Thank you. Thank you so much. Thank you. The next question we take from Mr. Sudhant. If you could just unmute yourself and ask the question. Yeah. Hi. Sorry. My question was, we are the only leading EV scooter in the Indian market with a chain drive. How much has it reduced our breakdowns? Does it add any cost benefit? Any competitors will start using this? Sudhant, very interesting question. Looks like you have been studying our product very closely. That is a very good catch. Chain drive has had a very positive response from customers. One would assume such a simple thing will not have a very meaningful change in or a very meaningful mind share in customer. Customers in India really prefer the chain drive because it adds durability. We have also engineered the chain drive in a way that the noise from the chain drive, which is the con of a chain drive, it adds noise versus a belt. We have really engineered the noise to a very bare minimum. If you ride our Gen3 vehicle versus if you ride any other EV vehicle with a belt drive, our noise is actually lesser. As a result, customers are loving the chain drive, the durability, as well as the good experience on low noise. We get a lot of positive feedback from customers on that. In terms of absolute kilometers of durability, I do not want to hazard a guess, but I think it is definitely two to three times. Okay. That is great. My second question is regarding the attrition at Ola in this quarter and for the year. On attrition data, Sudhant, I don't have it handy per se. In general, if I give you a thematic answer to that, I'm sure we will fire it to our filings. Generally, our attrition at a management level, core corporate and engineering levels is low. We have a vertically integrated business model, especially on the front end network, etc., as well as on our factories where a lot of junior staff work. Attrition over there gets counted in our overall attrition percentages. It's not a very like-to-like comparison when you compare us to any other automotive company, which doesn't have a vertically integrated business model. Okay. Thank you. Thank you. We'll take the next question from Mr. JInesh Gandhi from Ambit. Hi. Sorry. Yeah. Sorry. I'm with Oaklanec apital. I'm going to stick there. Quickly on two questions from my side. One is you have given delivery guidance of 65,000 for one queue. This number, is it conservative considering that we have addressed issues of fourth quarter as well as we'll start deliveries of motorcycles? How should we think about steady-state deliveries? I mean, ignoring the fourth quarter, which was aberrational. Jinesh, we are new to giving this Outlook stuff. We are just getting started on this. You can say it's sort of conservative, but I would call it a median Outlook. If we surprise on the upside, you can give us a pat on the back. Sure. Sorry, I joined in late. By when are we starting e-motorcycle deliveries? Deliveries started late last week, Jinesh. Okay. How has been the response for electric motorcycles given that it is first of its kind if I ignore the earlier Chinese-made products which have been there in the market? Jinesh, the response has been overwhelmingly positive. There is a very large amount of interest. If you see the number of media we have earned with our motorbikes. We do not do advertising, so we do not do paid media. It is all free media. Very large amount of visibility across social media and any other modern media. Customers walking in have had a lot of queries on the motorbike. We so far have not been able to have the vehicles in the stores for them to test ride because the vehicles were still in manufacturing and homologation. Now that that is done, the vehicles are getting to the stores, and the customer feedback is overwhelmingly positive. You said it correctly. This is the first major OEM electric bike. There have been a few startups here and there, a few Chinese kit importers here and there, but the first major OEM electric bike. In that sense, the interest from the customers is very high. Got it. Got it. Last question on cell manufacturing. We are indicating 5 gigawatt go will come by early FY2027. This seems to be much delayed as compared to the timelines as indicated in PLI. Do you expect any issues on our PLI incentives for cell because of this? Yeah. Jinesh, you are right from the timelines that we had given in our original PLI submission a few years back. This is roughly, I would say, one year or so, one year or so delayed, five quarters maybe. We are being very methodical and calibrated with our cell project, methodical on capital investment also, phase by phase. We want to make sure the first phase, which we have done, which is 1.5, succeeds, and then expand to 5G as well as on because this is India's first gigafactory. We should all remember this is nobody in India has done this before. In that sense, we also want to be very calibrated in making sure the product comes out with a high amount of testing and a high amount of rigorous vehicle and cell-level testing both. As far as the government is concerned, frankly, we're the only one in that PLI scheme who is doing it. There were three other people. None of them have done it. They've not even probably laid a brick of their construction. The government is actually looking at us as the bright spot of this. There was some news on a penalty last quarter. The government, in our private conversations, has also been very open to—they are very empathetic to the fact that it is a more complex endeavor, and they might be willing to manage the penalties to a minimum. Penalties also in this are not very—it is not a very onerous penalty clause. It is a few tens of crore. In that sense, it is not a very onerous penalty clause also. The headline there is the government is fairly empathetic to the fact that we have invested so much, we have constructed, we are producing, we are improving our yields, and we are bringing it into our vehicles. It is just that it is taking a little longer than initially planned. Got it. Got it. Sorry. Lastly, what is our CapEx guidance for FY2026, including auto and cell? Cell, we indicated INR 1,600 crore if we move 5 gigawatt. I would say auto and cell, both included, will be between INR 1,700-INR 1,800 crore. This includes both R&D that we capitalize as well as manufacturing CapEx. If I separate out the R&D and manufacturing, just hold on. I will tell you guys. Yeah. I would say, yeah, about 80%-85% of that INR 1,700 crore will be manufacturing, and the remaining will be capitalized R&D. Got it. Auto would be very low. Auto is sub INR 200 crore in our assessment. Yeah. Got it. Got it. Great. Thanks and all the best. Thank you so much, Mr. Gandhi, and apologies for the mix-up. Now we'll take the next question from Gunjan Prithyani. Yeah. Hi. Thanks for taking my questions. Apologies if I'm repetitive because I was a little late to the call. I just want to revisit this break-even volume number. There's been a sharp reduction in that from the last guidance you gave. Can you just talk us through what are the real drivers? I mean, can there be that significant gross margin difference? What's led to that? From a product mix perspective also, as bikes come through, how should we think about the margin? My guess would be bike would be at the lower margin initially, right? Some thoughts on what's behind this break-even volume reduction? Gunjan, two things. You mentioned gross margin. If you look at figure eight in the shareholders' letter, we have given you the gross margin movement. We've had significant gross margin movement, like I said, thanks to the Gen3 platform. Now, the bike, while it's a new category, it's built on the Gen3 platform. So it has all the cost savings of the Gen3 platform. In fact, it goes one level further on the Gen3 platform with something, so I would call it a Gen3.5. So all the bike starts with a very similar gross margin as where our scooters are today with the Gen3 platform. So our gross margins have gone up significantly from Q4, which was 19%. In Q1, it's about 28%-30%. In Q2, once the PLI comes in, will add another five-seven percentage points of margin. All that accounted for brings the operating break-even point closer. That said, we've also reduced our operating expenses. It's a twin impact of gross margin improvement, significant gross margin improvement, as well as auto, as well as operating cost reduction, which also, as we call it, project luxury. We've been working on it, and we spoke about it in the previous quarter also briefly. We've had significant savings across all aspects of our business over the last quarter or so. Okay. How would warranty fare in that context versus full of last year to this year? Any guidance you want to lay on that? How directionally as a percentage of sales that comes down? See, Gunjan, we covered warranty, but very quickly, for your benefit, I'll do it again, Warranty, what we have provisioned for in Q4 as a one-time activity, will make sure we do not have to do any more provisions for our Gen1 and Gen2 vehicles that we have sold so far because all of that will either already have been provisioned before or with this INR 250 crore will be accounted for for the remaining life of warranty. Going ahead, Gen3 products, which is largely what we are selling, and motorcycle is also based on the Gen3 platform, is seeing a much lower warranty requirement because of multiple things. One, like one Siddharth, I think, said, the chain drive, that in itself reduces warranty cost. No hub motor reduces warranty cost because it is only a mid-drive motor across all our products now. Much more integrated electronics reduces warranty costs. Very significant engineering things which have reduced component failures and much more vertical integration, which reduces component failures. As a result, warranty issues or quality issues have come down significantly in Gen3. That said, we have still increased our provision that we provision for in our books for Gen3 products compared to what we were doing for Gen1 and Gen2 in the past. Right? Gen1 and Gen2 was about INR 3,250 in the past. Gen3, we will not share the exact number, but we have increased it from that. We expect no one-time quarterly exceptional charges on either earlier products or Gen3 products going forward. Okay. Got it. Lastly, just your thoughts on this whole LFP versus NMC. I think NMC has generally been predominant, the predominant in two-wheelers. Do you see merit in LFP, and is that something that is part of the agenda for future product, especially as we are also sort of working with the battery? Seen to hear your thoughts on that. Absolutely, Gunjan. LFP is on our roadmap. What we are doing is the 4680 cell is going to be both NMC and LFP compliant. We are starting with the 4680 NMC, but soon enough, with the same manufacturing, we can actually do 4680 LFP also. From an engineering perspective, LFP will be a drop replacement of our 4680 NMC cell. In that sense, as and when we stabilize 4680 NMC, we will bring our own 4680 LFP into our own vehicles. That could mean what, 15%-20% reduction in the cost? Is it stable for is there any issue in terms of integrating that in two-wheelers? Because in the past, NMC has generally been preferred. There is no engineering issue in integrating that. There is some trade-off in vehicle dynamics and weight versus power and weight versus range. That said, in some segments of the portfolio, you can do it, especially for lower-range products. Our higher-range products will continue to be NMC because you need that volume efficiency which NMC brings. On the lower side, the 3 kilowatt-hour product, the 2 kilowatt-hour product would move to LFP as we bring our 4680 LFP cells. Okay. Got it. Thank you so much. I'll join back. Thank you. Thank you. We'll take the next question from Mr. Arvind Sharma. Yeah. Hi. Hi. Thanks for taking my question. First question would be on the gross margin difference between mass and premium vehicles once everything is stabilized. What would be the difference out there? Arvind, there is a difference, obviously, in mass and premium, but it is in the single digits in terms of gross margin. It's not a very materially stark difference. From our business strategy perspective, we are fairly agnostic to whether we're selling a premium product or a mass product because we want to build a franchise across both. In the end, the gross margin profile will be an outcome of whatever ratio we sell, and it's not very different across both levels. Thanks. Thanks, Bhavish. I do want to add, though, by the way, on that note, Arvind, sorry. We have recently in Q4, by the way, you would have seen in the summary, we have started actually monetizing software with our MoveOS Plus. That actually adds much more margins on the premium products. Whenever a customer buys a vehicle, he can choose to buy the MoveOS Plus, which brings a lot of additional features which don't come with the standard vehicle software pack, which is free. We have very high, almost 58% of all our vehicles now are sold with a MoveOS Plus pack. It is almost like a 100% gross margin product. On the premium side, almost 70% of the vehicles are sold with a MoveOS Plus, and this number is only going up. Got it. Thanks. Thanks, Bhavish, for that. Also, could you throw some light on the gig vehicles? How has the reception been? Is it something that is contributing effectively to the volumes? Arvind, the gig vehicle is not yet released or launched. Like I said in today's commentary, we are going to phase out new products now towards a more longer period. Our focus right now is the Roadster platform, which is Roadster X, X Plus, and then the Roadster itself, Roadster and Arrowhead. The Gig Plus, Z, as well as the three-wheeler platforms will be a little later. The disruption that we saw in February, is it possible to share the cancellations, if any, on account of that? Yes. I thought this question would come up, so I have a bit of a walk of numbers that I'll walk you all through. I know that I think the February numbers created some confusion. We thought we were actually being transparent with everybody, but it looks like it added more questions. If I just give, I'll take a minute and just walk through some of the numbers. Total orders we received in, and by the way, I want to just clarify for everybody. There are three different KPIs here. Orders/sales is when we receive the full amount or almost the full amount of the vehicle. A customer goes into our store and says, "I'm buying this vehicle. Here is the money," or, "Here is my loan," and he gets a loan signed off by he puts a down payment and gets a loan. That's what an order is. It's not just an INR 1,000 booking or an INR 5,000 booking. An order is largely a proper sale. So that's 25,207, 25,000 orders we got. Out of them, till date, we have had about 3,000 cancellations. We have about 2,000 products for which we got orders, but we haven't yet started deliveries, like the S1 Pro+ with the 4680 cell or the Roadster series, which is now just starting to get delivered this week onwards. About 2,000 orders of such products. Almost the remaining vehicles have been registered. The February thing, which created a little bit of confusion, is all behind us now. There have been 25,000 overall orders, 3,000 odd cancellations, 2,000 odd orders for which deliveries have yet to start or have just started this week. The remaining have all been largely registered. Arvind, does that clarify for you? I think you're on mute. Yeah. Yeah. It clarifies. Thank you so much for answering the questions. Thank you so much. Thank you. Now we'll take the last question from Mr. Raghavendra Goyal. Please unmute yourself and ask your question. Yeah. Hi. Thanks for the opportunity. I just wanted to know if you can guide directionally the stores that we have opened during 3Q, what would be the cost approximate sitting in our balance sheet for those stores, additional stores, 3,000 stores that we have opened? Any ballpark number if you can guide in that sense. I'm assuming, Raghavendra, you're talking about the CapEx that went into the stores. In total, we opened about 2,400 stores, new stores, our own stores, right? 800 we had, 3,200 we went to, and 800 is non-company stores, 4,000. For these 2,400, ballpark, I would say, at least what, INR 120 crore or so or lesser? Lesser than that. It is very efficient because our store design and the approach is very efficient that way. It will be around close to INR 100 crore, not even INR 120 crore. Okay. Okay. Thanks for that. Thank you. Now, with this, we will have to conclude the session here. To all of 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 for joining us, and now you may log out from the conference call. Have a good day.