Ola Electric, under the leadership of Bhavish Aggarwal, continues to assert dominance in the electric two-wheeler (EV 2W) market. Its success is driven by a broad product range, extensive vertical integration, and a direct-to-consumer (D2C) sales model. According to a research note from brokerage firm Bernstein, Ola’s aggressive pricing strategy, supported by government schemes like the Production Linked Incentive (PLI) and FAME subsidies, has significantly boosted its market position.
In Q1 FY25, Ola Electric reported an impressive gross margin of 18.4%, outperforming its rivals, with TVS Motor at 14%, Bajaj Auto at 12.3%, and Ather Energy at 7%. Although the company posted a -2% EBITDA margin in the June quarter of FY24, it still showed marked improvement compared to TVS (-7.9%), Bajaj (-10.4%), and Ather (-37%). Ola’s premium models, such as the S1 Pro and S1 Air, have been instrumental in driving positive operating EBITDA, while its competitors continue to report losses.
Ola’s advantage lies in its high localisation and in-house manufacturing capabilities, which help reduce costs and enhance scalability. Its D2C model strengthens profitability by eliminating intermediaries, allowing competitive pricing that appeals to its urban, tech-savvy customer base. In contrast, Ather Energy remains focused solely on premium customers but struggles with lower volumes, while Bajaj Auto’s Chetak escooter faces performance challenges despite its metal body construction.
Goldman Sachs has recently initiated a ‘buy’ rating for Ola Electric, forecasting EBITDA breakeven by FY27. With 14 product launches planned, including electric three-wheelers, Ola is well-positioned to solidify its leadership in the EV market, outpacing rivals like TVS and Bajaj Auto.
Key Highlights:
- Ola Electric leads the EV 2W market with a strong gross margin of 18.4% in Q1 FY25, outpacing competitors like TVS, Bajaj, and Ather Energy.
- High localisation, in-house manufacturing, and a direct-to-consumer model contribute to Ola’s cost efficiency and market competitiveness.
- Goldman Sachs expects Ola Electric to achieve EBITDA breakeven by FY27, supported by a robust product pipeline and future expansion into electric three-wheelers.