TVS Motor inches closer to Ola in electric two-wheeler market

This marks the second consecutive drop in market share for Ola. Kumar Rakesh, analyst at BNP Paribas Securities India notes that in terms of volume share, Ampere Vehicles gained the most, while Ola lost the most in March. This is the likely reason for the price cut by Ola, said Rakesh in a 10 April report. Ola cut the price of S1 Pro electric scooter by ₹5,000 at the end of FY23. However, this is valid only till 16 April.

On the other hand, TVS’ market share in March rose for the sixth time in a row. The company’s electric scooter, iQube, continues to see increased traction. In the March quarter (Q4FY23), iQube formed 5% of TVS’ total two-wheeler wholesale volume, up from 3.5% in Q3.

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“This is a sign of consumer’s confidence in incumbent brands as the electric vehicle customer looks for better quality and reliability. There is a possibility of TVS overtaking Ola in terms of market share in the medium term provided the ongoing momentum sustains,” said Varun Baxi, an analyst at Antique Stock Broking.

Overall, the share of e-2Ws in the total two-wheeler market stood at nearly 6% in March, the highest in FY23. This indicates a good start to FY24.

For FY23, e-2W penetration rose by about 260 basis points year-on-year to 4.5%. There is room for further improvement as companies scale up existing products and launch new ones.

“We view Ola S1 Air’s delivery, starting in July, and Honda launching two electric two-wheeler models in FY24 as the next positive catalysts for e-2W sales and mix,” said the BNP Paribas report.

To be sure, eventually when government incentives disappear, demand could get impacted as affordability becomes an issue. Thus, how the e-2W market shapes up post this is a key factor to watch.

For now, other listed incumbents, Bajaj Auto Ltd and Hero MotoCorp Ltd, don’t have a significant market share in e-2Ws. Increase in traction would be an important trigger for investors in the stocks of these two companies. In the case of TVS, its expanding foothold in the e-2W segment is one reason that has aided investor sentiments. The TVS stock is currently flirting with its 52-week highs of ₹1176.90 apiece seen in October.