Ola’s e-scooter raises the heat for India’s incumbent two-wheeler makers

Photo: Company website

Ola Electric has commenced bookings for its electric scooter. Consumers can reserve an Ola Scooter for as low as 499 ($6.6). What’s more, one can modify the order or get a full refund on cancellation. In short, the deal looks mouth-watering and it is likely to attract potential consumers, say analysts.

“Maharashtra has an early-bird incentive (valid till 31 December) of 15,000 and potential customers may want to get ahead in the queue by booking their Ola Electric to avail the extra incentive,” said Nomura Financial Advisory and Securities (India) Pvt. Ltd analysts in a note on 15 July.

Shares of incumbent auto firms were unperturbed by this development. For perspective, shares of TVS Motor Co. Ltd, Bajaj Auto Ltd and Hero MotoCorp. Ltd closed marginally higher on Friday on the NSE.

“As seen globally, success of startups could see rapid increases in their market values, while at the same time, incumbent OEMs (original equipment manufacturers) could see de-rating if they don’t launch compelling products,” said Nomura’s analysts.

Of course, incumbents are upping their ante on this front. It helps here that the government has hiked incentives for electric two-wheelers (e-2W).

In a report last month, Ambit Capital Pvt. Ltd analysts said, “By FY26, capital cost of electric two-wheelers (e-2Ws) and petrol 2Ws should be equal, resulting in about 30% lower total cost of ownership for e-2Ws.”

Note that the auto industry’s e-2W volumes for FY21 at 143,837 units represent penetration levels below 1%. Of course, this measure is expected to increase.

“This could improve to 5-10% over the medium term with falling EV prices due to the reduction in battery costs, localization efforts and scale benefits. Large listed OEMs (Hero, TVS and Bajaj) are positioning themselves to benefit from the anticipated EV adoption,” said Emkay Global Financial Services Ltd’s analysts in a note on 16 July. They added, “However, considering competition from other OEMs (Hero Electric, Ola Electric, Okinawa, Ampere, etc.), we expect some pressure on market share and margin in the medium term.”

To be sure, it remains to be seen if the initial booking reservations for the Ola e-scooter would eventually translate into actual sales. Much depends on the final price and if that is high, then customer interest could wane.

The article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.