Ola Electric clearly leads India’s electric two-wheeler market. The company accounted for more than 42% of the market in February, having gained the most market share from the previous month (about 277 basis points), according to BNP Paribas Securities India. One basis point is 0.01%.
TVS Motor Co Ltd was in second place with 17.5% of the market, having lost the most market share (118 basis points) in February. India’s electric two-wheeler industry may be nascent, but competition is also heating up from other incumbents such as Honda and Suzuki, which are expected to launch electric two-wheelers. Listed two-wheeler companies are also in the process of launching new electric models.
It may be too early to tell if Ola will remain the market leader, but it does own a large part of the electric two-wheeler ecosystem, which gives it the upper hand over its peers. Besides manufacturing electric two-wheelers, it also produces components such as cells, battery packs, motors and vehicle frames. Moreover, under the production-linked incentive (PLI) scheme for automobiles and auto components, the International Centre for Automotive Technology awarded its first PLI – automotive certificate to Ola, meaning the company is eligible for PLI incentives for the Ola S1 Pro (Gen2).
However, electric two-wheeler makers have a long path to profitability. As of now, they are using discounts to sell electric vehicles, prioritising market share over margins. “Assuming gross margins of 15-20%, we estimate Ola will achieve Ebitda breakeven (excluding the cell manufacturing business) at annual volume of 0.5 to 0.9 million units and profit-before-tax breakeven at 0.7 to 1.3 million units," analysts at Ambit Capital wrote in a report on 1 March.
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