In the fast-evolving landscape of India’s electric two-wheeler (E2W) market, industry leaders Ola Electric and Ather Energy are facing a challenging investor landscape due to substantial losses and regulatory uncertainties, according to media reports.
Ather Energy, a prominent player in the sector, resorted to a rights issue after potential investors hesitated to commit to the company’s ask of over $200 million at a valuation of at least $1 billion. The move was seen as a response to the lukewarm investor interest, indicating caution despite the company’s rapid growth in the green mobility sector.
Hero MotoCorp-backed Ather Energy reported a significant increase in losses during the financial year 2022-23, with losses surging over 2.5 times compared to the previous fiscal year. Despite robust sales, the company witnessed a sharp rise in total expenses, resulting in a reported loss of Rs 864.5 crore in FY23.
Similarly, Ola Electric, backed by SoftBank, experienced a modest 10 percent valuation increase to $5.5 billion after securing $140 million in a funding round led by existing investor Temasek. However, the company reported a substantial net loss of Rs 784.1 crore in the fiscal year FY22, signaling a fourfold jump from the previous year.
According to industry analysts, the current financial climate emphasizes the need for strategic fundraising, as smaller rounds may sustain these startups temporarily but could potentially impact future growth. It is imperative for these companies to boost sales and minimize losses to attract larger investments.
The latest BNP Paribas India EV report highlighted a decline in Ola Electric’s market share to 29 percent in September, with Bajaj Auto gaining the most ground at 11.1 percent. Among the top-five original equipment manufacturers (OEMs), Bajaj Auto experienced the highest monthly sales volume growth, while Okinawa faced a decline in sales.
In conclusion, the Indian electric two-wheeler market is witnessing a crucial phase where market leaders like Ola Electric and Ather Energy are navigating challenges to secure funding and sustain growth amidst a shifting landscape of regulations and market dynamics.