New Delhi: Bhavish Aggarwal-led, recently listed Ola Electric is rapidly losing market share to rivals in the domestic electric two-wheeler market amid increasing competition, and market analysts are warning investors to remain “cautious” amid the volatile stock.
According to a recent report by Jefferies, TVS and Bajaj have expanded their portfolios to include more affordable electric two-wheelers. The move has helped them gain between 4 and 7 percent market share each, with TVS now holding 19 percent and Bajaj 18 percent.
According to the report, Ola Electric’s market share in the electric two-wheeler market has declined month-to-date from 49 percent in the June quarter (Q1 FY25) to 33 percent in August. Market observers said that while Ola Electric’s long-term potential could be attractive, especially given the favorable outlook for the EV market, the current valuation seems quite speculative.
“Investors should be cautious, especially given the company’s ongoing losses and high volatility in its share price. For new investors, it may be wise to wait for a more stable entry point or consider the stock as a long-term investment with a high risk-reward ratio,” said Saji John, senior research analyst at Geojit Financial Services.
According to analysts, the launch of cheaper electric vehicles and aggressive discounting by incumbents TVS and Bajaj are helping them take market share away from their rival Ola Electric. Ola Electric shares continued to fall, closing at Rs 126.26 apiece on Friday. The stock is now trading about 20 percent lower from its all-time high.
To boost its prospects, the company last week unveiled electric motorcycles across different price ranges. While motorcycles dominate the broader two-wheeler market in India, their share in the EV segment currently stands at just 1 percent.
Jefferies stressed that the success of Ola Electric’s new model will depend on its performance on the road and the overall profitability of electric bikes in India. Motorcycles dominate the Indian two-wheeler market with a 63 percent share of the total volume. Jefferies expects the market share of electric two-wheelers to increase from the current 5.6 percent to 13 percent by fiscal 2027.
