Ola Electric slips to number three in EV two-wheeler market as rivals gain ground

Time of India

6 days ago

Ola Electric
fell to the third position in India's electric two-wheeler market in May, losing ground to legacy companies
TVS Motor
and
Bajaj Auto
amid a sector-wide sales slowdown. The erstwhile market leader, which has been grappling with operational and regulatory challenges, saw its market share shrink to a fifth from more than half just 13 months ago.
The Bhavish Aggarwal-led company had a 20per cent market share in the first 26 days of May, down from a 22.1per cent share in April, showed data from the government-run Vahan portal. It recorded 15,221 vehicle registrations during May 1-26, a steep decline of about 60per cent from 37,388 in the entire May 2024.
In contrast,
TVS Motor
and Bajaj Auto gained market share this month, accounting for 25per cent and 22.6per cent , respectively, despite marginal dips in volume.
Newly listed
Ather Energy
also reported a drop in market share, down to 13.1per cent in May from 14.9per cent in the previous month, with vehicle registrations declining to 9,962 units from 13,287 units during this period.
Queries sent by ET to Ola Electric remained unanswered till press time.
The company's latest sales figures fall way short of the targets shared by CEO Aggarwal on the last quarterly earnings call, where he said the auto segment could break even at the earnings before interest, taxes, depreciation and amortisation level with monthly sales of about 50,000 units in the upcoming quarters.
Last week, the company's board approved raising up to ₹1,700 crore through non-convertible debentures and other debt instruments — the first fundraising move since its initial public offering (IPO) in August 2024. The funds are expected to bolster operations and shore up finances amid increased regulatory scrutiny and a falling stock price.
On Tuesday,
Ola Electric Mobility
shares closed at ₹52.49 on the BSE, well below their issue price of ₹76.
The slide in market share comes as the company has come under the scanner for issues including discrepancies in reported sales data, concerns over vehicle quality and missing trade certificates at several retail outlets.
In February, Vahan data showed 8,652 registrations for Ola Electric, whereas the company claimed in its filings that it had sold 25,000 units. The mismatch was attributed to a temporary backlog during contract renegotiations with registration service providers Rosmerta and Shimnit India.
The discrepancy, however, prompted inquiries by the Ministry of Heavy Industries and the Ministry of Road Transport and Highways.
On May 5, ET reported that intellectual property rights for the Ola brand — currently held under
ANI Technologies
— are being moved to a new holding entity controlled by Aggarwal's family office, a move opposed by some ANI shareholders.
Meanwhile, the company's cell manufacturing project is shrouded in uncertainty. Ola Cell Technologies Private Limited, a wholly owned subsidiary of Ola Electric, began construction of its gigafactory in May 2023 in four phases to manufacture lithium-ion cells for electric vehicles. In its IPO prospectus, the company had earmarked ₹1,227 crore for expanding cell production capacity from 5GWh to 6.4GWh under the second phase of the plan. However, in a May 15 report, monitoring agency
ICRA
said none of the funds had been utilised till then.
'Ola Electric has had significant issues with after-sales service, which has dented customer confidence in a big way,' said VG Ramakrishnan, managing partner at Avanteum Advisors LLP. 'While competition intensity has increased, in Ola's case, I think it has more to do with their own issues, internal company organisational issues, rather than just on market factors or competitive factors. The competition intensity will only increase from legacy players. It is not going to reduce in the future. So what will be the levels at which Ola's market share will get sustained is the question.'
Ola Electric has faced regulatory run-ins as well. On January 11, the Central Consumer Protection Authority sought documents from the company as part of an ongoing probe, following a show-cause notice issued on October 8, 2024, over alleged consumer rights violations, misleading advertisements and unfair trade practices.
Despite mounting challenges, the company continues to expand its product line-up. On May 23, it began deliveries of its
electric motorcycle
, the Roadster X. Earlier, on January 31, the company launched its third-generation electric scooters, promising greater efficiency and power. Last year, it unveiled the S1 Z and Gig models, targeting gig workers and cost-conscious consumers.
In October-December 2024, Ola Electric Mobility's net loss widened 50per cent year-on-year to ₹564 crore, while its operating revenue fell 19per cent . The company has yet to report its financial results for the fourth quarter of 2024-25.