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India’s booming electric scooter industry is poised for a transformation as traditional giants Bajaj Auto and TVS Motor Company drive market leader Ola Electric out of pole position.
Dented by mounting complaints about the quality of its products and after-sales service, and a string of top-level exits, SoftBank-backed Ola Electric saw its market share slump to 19% in December 2024, falling behind Bajaj’s 25% and TVS Motor’s 23%.
This meant Ola sold 13,673 electric scooters last month, its worst performance since September 2022, according to the Indian government’s vehicle registration database Vahan.
That is far cry from when Ola, which launched in 2017 and went public in a USD 734 million share sale in August 2024, led the market through most of last year—including one month when it held a 52% share of the sector’s sales.
Bajaj and TVS, whose mainstay are internal combustion engine (ICE) two-wheelers, are now taking over an EV market that grew 33% in 2024, compared with an 11% expansion in the overall sector.
Stricter government emission regulations, environmental concerns among younger buyers and rising fuel prices are set to further push the adoption of electric two-wheelers, analysts said.
“While EVs may not yet contribute significantly to their bottom lines, they are essential to incumbents’ long-term sustainable value creation strategy,” Harshvardhan Sharma, head of automotive retail consulting at Nomura Research Institute, told Nikkei Asia.
Bajaj and TVS are repurposing “their existing strengths in production, distribution, and customer service to gain a competitive edge in emerging markets like EVs,” Sharma added.
Ola’s shares have fallen in tandem and are now trading below its INR 76 (USD 0.88) IPO price, down from a record high of INR 146 (USD 1.69) in August 2024.
Last year, the traditional companies expanded their offerings to compete across price points. TVS launched a premium model called TVS X in August, which at the equivalent of about USD 2,900, is priced considerably higher than its flagship model iQube, which sells for under USD 1,000. It is slated to launch another model in 2025.
Bajaj, which already sells four versions of its Chetak electric scooter in the USD 1,100–1,300 range, launched two new versions of the model in December 2024 at a slightly higher price.
The scooter makers have also boosted marketing budgets, targeting “urban and semi-urban demographics,” while Ola Electric retreated from deep price discounting in December, Sharma said.
Ola Electric has yet to turn a profit, unlike Bajaj and TVS which raked in earnings of about USD 256 million and USD 76 million, respectively, in the July-September 2024 quarter.
Ola only sells electric scooters so its approach “contrasts with incumbents like Bajaj and TVS, whose diversified revenue streams from ICE vehicles allow them to cross-subsidize their EV operations,” Sharma added.
TVS and Bajaj have also leveraged their extensive distribution and service networks, built up over years for their traditional vehicles, to the benefit of EV sales, said Ravi Bhatia, president of the Indian unit of UK-based automotive analytics company Jato Dynamics.
Meanwhile, Ola Electric, which did not respond to requests for comment on this story, has been facing regulatory heat from India’s consumer protection watchdog.
In October 2024, the Central Consumer Protection Authority said it had received over 10,000 complaints about Ola’s scooters in the preceding year. Separately, India’s Ministry of Heavy Industries had earlier asked its testing and certification agency to conduct an audit of Ola’s service centers.
On January 10, Ola received a third notice from the consumer protection watchdog as part of its ongoing investigation.
“Ola has not been able to communicate a favorable and stable image to the customer … At this price point, the customer needs some peace of mind from the product,” Bhatia said. Ola’s scooters retail between USD 700 and nearly USD 1,500.
The electric scooter market is far from settled, however, with the vehicles making up just 6% of total two-wheeler sales last year in India, the world’s largest scooter market.
December 2024 was also an exceptionally weak month for sales, and Ola still shifted more than 400,000 of its scooters through last year, more than double Bajaj’s total and considerably higher than TVS Motor’s 220,000 unit sales, according to official data.
To win its market lead back, Ola Electric needs to “extinguish all fires, keep the price competitive and start earning customer peace of mind,” Bhatia said.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.
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