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Legacy companies beat the daylights out of Ola, Ather and Hero in electric two wheelers, ET Auto - Awaj Ludhiana Ki
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Legacy companies beat the daylights out of Ola, Ather and Hero in electric two wheelers, ET Auto

by author
January 16, 2025
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Legacy companies beat the daylights out of Ola, Ather and Hero in electric two wheelers, ET Auto
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<p>This is far cry from last year, when during the summer months erstwhile market leader Ola was selling every second electric two wheeler in the country while legacy OEMs were at a fifth of the market. </p>
This is far cry from last year, when during the summer months erstwhile market leader Ola was selling every second electric two wheeler in the country while legacy OEMs were at a fifth of the market.

New Delhi: The legacy two wheeler ecosystem has rapidly and, it seems, decisively taken over the electric two wheeler (e2w) market, leaving electric-first manufacturers way behind. Their existing, widespread distribution networks, pricing power and enhanced product range have given a definite edge to TVS Motor Company and Bajaj Auto. But the country’s biggest legacy two wheeler OEM, Hero MotoCorp, is low down in the pecking order for e2ws, much below electric-first OEMs. According to Vahan data, Hero sold a little over 500 e2ws in the first 16 days of this month, against over 10,300 units sold by TVS and more than 9000 units by Bajaj. In other words, Hero sold in 16 days roughly the same number of vehicles that TVS sold daily.

In January, so far, TVS and Bajaj each accounted for almost every fourth e2w sold in the market this month, Hero’s share was well below the 2% mark. Every fifth e2w sold was an Ola Electric while Ather Energy accounted for about 15% of the market.

This is far cry from last year, when during the summer months erstwhile market leader Ola was selling every second electric two wheeler in the country while legacy OEMs were at a fifth of the market. But Ola Electric has been ceding market share, with January sales till date not even touching the 8,000 unit mark. Ather, the other electric-first company, sold over 5500 units during the same period.

Hero MotoCorp CEO Niranjan Gupta has called his company’s approach to electric two wheelers a “marathon, not a sprint” and leadership in this industry like a “Russian roulette”, perhaps referring to the sudden turns in fortunes of the top five players over the last several months. Not only does Hero have to contend with strong ICE competitors, Bajaj and TVS, in the electric two wheeler race from a position of weakness, its bete noire, Honda Motorcycle & Scooter India (HMSI) is also expected to enter this market with products being available in metro cities by the month end.

A dealer for HMSI said that the products, Activa e and QC 1, will first be available in large metro cities, with launch for smaller towns being postponed to April. Pricing of the two models is expected during the Bharat Mobility show beginning on Friday. There is widespread expectation of HMSI pricing the two new models competitively.

Meanwhile, this person also said that Hero has been a laggard in the e2w race because “it lacked focus, instead concentrating its energies on the ICE motorcycle battle it has been waging with HMSI. Besides, Hero has not had a scooter ecosystem, so to say. This company will take time to ramp up in the electric two wheeler market”.

Last month, Hero launched the Vida 2 range of scooters with one variant priced below the INR one lakh rupee mark, thus marking its presence in the mass segment of e2w. Also, it has been focused on setting up an advanced charging network; Hero is also an investor in Ather.

On its part, Bajaj Auto has already said it aspires to be the market leader in e2w and will soon be entering the gig workers’ segment of lower priced, lower range electric scooters. Its entry into the sub-one lakh rupee segment last summer led to a dramatic increase in sales of the electric scooter brand, Chetak.

Legacy wins:

The march of the legacy OEMs comes amid several changes in the contours and competitive intensity of the e2w market in 2024. One, the formidable Japanese OEM Honda has decided to throw its hat in the ring. Two, erstwhile leaders in the segment – Hero Electric, Okinawa and others – have all but ceased operations due to a mix of policy flip flops and subsidy misappropriation allegations. Three, subsidies have been substantially reduced for e2w. And four, the market is rapidly moving to lower price points. Late last year, Ola launched Gig and S1 Z range of scooters starting at INR 39,999, effectively lowering the entry barrier significantly.

The legacy OEMs, meanwhile, have not set their sights on the mass end of the e2w market, they also come armed with consumer trust. Ola has been facing consumer ire due to frequent product breakdowns and its inability to address service issues at a large scale.

Of course, Ola is now addressing both these issues by ramping up its service network while also significantly expanding distribution. And anyway, products from TVS and Bajaj (iQube and Chetak) have also had their share of quality issues.

Now, an added complication could come from the entry of Honda Motorcycle & Scooter India (HMSI), the number two player in the ICE two wheeler segment with an all-India sales and distribution network and promise of product quality.

As for Ather, the company is in the midst of launching an initial public offer (IPO), for raising up to INR 4,500 crore. Some existing investors, including co-founder Tarun Mehta, will be selling shares, as per Ather’s DRHP. The company has said it will utilise proceeds from the IPO to set up an e2w factory in Maharashtra and in research and development but sceptics have questioned the massive capacity expansion vis-a-vis sales growth projections.

  • Published On Jan 16, 2025 at 12:23 PM IST

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