Ola Electric was able to increase sales and market share in April even with the partial removal of the Center-sponsored subsidy. Its market share in April is actually at a record high. In contrast to its competitors TVS, Bajaj, and Ather, all of which have experienced a decrease in sales and market share following the termination of subsidies, the company has been able to achieve this by not passing on the price hike to customers.
The Bengaluru-based start-up avoided the interruption in demand brought about by the removal of the subsidies by stealing market shares from its competitors TVS Motor Company, Ather Energy, and Bajaj Auto in April.
With volumes of around 34,000 units in April, Ola increased its market share to 52%, according to vehicle registration statistics provided by ICICI Securities and Vahan. This volume total, even with the incentive removal, is the same as it was in January and February.
In the same month, TVS and Bajaj closed with 12% of the market, at 7,653 and 7,515 units, respectively. Ather was the lowest performer in the same month, seeing its share almost drop to 6% with 4,052 units.
Three important factors, according to market observers, account for both the increase in market share and the consistent monthly volume.
“Ola has hardly taken a price hike post the FAME reduction, compared to Rs 5,000-15,000 range by Ather. TVS, whose vehicles are quite pricey compared to OLA, hasn’t taken much price hike but has still lost market share,” said Yogesh Aggarwal, head of research, HSBC Securities and Capital Markets.
The report further states that Ola’s distribution is better than the competition. “In some states like Uttar Pradesh, Bihar, Rajasthan and Gujarat, where incumbents like Bajaj and TVS may not be aggressively distributing their EVs, OLA has a higher market share,” the HSBC report added.
Lastly, Ola brought down its product entry price to Rs 70,000 from Rs 89,000 making it cheaper than the Honda Activa, India’s largest-selling petrol-powered scooter. This has allowed Ola to chase buyers who considered e2Ws to be out of reach. None of the other e2W players have offerings priced below Rs 1 lakh.
On April 1, the government rolled out the Electric Mobility Promotion Scheme (EMPS), where the subsidy per e2W was halved to Rs 5,000/kWh from Rs 10,000/kWh and capped to a maximum of Rs 10,000 per vehicle. This new scheme replaced the previous subsidy scheme titled FAME-2 (Faster Adoption and Manufacturing of Electric Vehicles).
Bajaj Auto, which is the third largest e2W maker, is ready to jump into the mass market segment under the Chetak brand. In the ongoing June quarter, the Pune-based company will add one to two cheaper derivatives of the Chetak. The company, however, has not provided price indications.
“This will give us a larger play in the mass segment. It will be better priced and hopefully give us far more traction,” Sharma added. Presently, the cheapest Chetak is priced at Rs 123,300.
Electric two-wheeler market grew by 30% in FY24 to 947,087 units as against 728,205 units clocked in FY23, as per data shared by the Federation of Automobile Dealers Association. Growth is expected to taper in FY25 following the reduction in subsidies.
