Abhishek Gaur
26 Sept 2024
Ola Electric outperforms competitors with its high gross margins, vertical integration, and diverse product range, securing a leading position in the EV 2W market.
Ola Electric, led by Bhavish Aggarwal, has solidified its position as the leader in India's electric two-wheeler (EV 2W) market. Its diverse product range, high vertical integration, direct-to-consumer (D2C) distribution model, and competitive pricing, aided by PLI and FAME subsidies, have fueled its growth.
According to Bernstein, Ola Electric is on track to achieve EBITDA profitability, boasting the highest gross margin among its peers. Premium models like the S1 Pro and S1 Air are already generating positive operating EBITDA, while competitors like TVS and Bajaj Auto are facing per-unit EBITDA losses. In Q1 FY25, Ola Electric posted an impressive gross margin of 18.4%, outperforming TVS, Bajaj, and Ather Energy. Its focus on localization and in-house component manufacturing has driven its higher profitability.
Ola targets both premium and mass-market segments, while Ather Energy caters to premium customers at higher price points but with lower volumes. Bajaj Auto’s Chetak, though affordable, lags in performance and youth appeal.
Goldman Sachs recently gave Ola Electric a 'buy' rating, forecasting EBITDA breakeven by FY27, driven by declining battery pack prices. With 14 product launches planned, including electric motorbikes and three-wheelers, Ola’s competitive edge remains strong. Although falling battery prices may benefit competitors, Ola’s brand, distribution network, and vertical integration provide it a lasting advantage.
Source: INC42
