Ather Energy Vs Ola Electric: Decoding The Numbers Behind The EV Giants

Riding the IPO wave in the domestic equity market this year, Ather Energy is set to become the second electric mobility startup to go public. 

Amid growing appetite for new-age tech stocks among Indian stock market investors, 10 such companies have already listed on the bourses this year, including Ather’s biggest competitor Ola Electric.

Nearly a month after the Bhavish Aggarwal-led startup made its public market debut with a primary issue of INR 5,500 Cr, Ather filed its DRHP with the SEBI for an INR 3,100 Cr public offering (primary capital). Besides a smaller IPO size compared to Ola Electric’s, there are quite a few fundamental differences between the two EV startups that led the wave of premium category consumer escooter adoption in India.

Despite having a first-mover advantage, Ather fell behind Ola Electric due to the latter’s speed in expanding market reach, creating buzz about its products, and scaling up infrastructure and sales. 

This has resulted in Ather trying to catch up with deep-pocketed Ola Electric ever since the latter’s entry into the two-wheeler EV segment.

Ather’s Muted Growth Compared To Ola Electric

Ola Electric was founded in 2017 and began the deliveries of its first EV model, the Ola S1 Pro, in December 2021.

In the year ended March 31, 2022 (FY22), Ola Electric clocked a revenue of INR 373.4 Cr. In FY23, its revenue grew over 7X to INR 2,782.7 Cr. Continuing the sharp growth, Ola Electric’s operating revenue in FY24 stood at INR 5,009.8 Cr.

In contrast, Ather began the deliveries of its first escooter model, the Ather 450, in September 2018. Following that, its flagship escooter, the Ather 450X, was launched in January 2020. 

As per publicly available data, the EV startup clocked INR 35.3 Cr in operating revenue in FY20, which grew almost 9X from INR 4.2 Cr in the previous year.

Ather’s operating revenue grew to INR 79.8 Cr in FY21 and jumped further to INR 408.9 Cr in FY22.

In FY23, Ather’s top line zoomed over 4X YoY to INR 1,780.9 Cr. However, due to a decrease in FAME-II subsidy, its operating revenue fell to INR 1,753 Cr in the last fiscal year (FY24).

It is pertinent to note that during this time, Ather also launched a few new vehicle models. Ather 450S was launched in August 2023, followed by its top-of-the-range escooter, the Ather 450 Apex, in January 2024.

As we reported earlier, Ather chose a patient approach in developing its technology and building distinguishable designs. While this helped the startup make a name for itself in the initial years of EV adoption, the game changed after 2020. With the Centre promoting adoption of EVs via the FAME scheme subsidies, several competitors raced ahead of Ather.

In fact, for several months in 2022, Ola Electric, which led the charts in terms of monthly EV sales, was followed by the likes of Okinawa Autotech, Hero Electric, and Ampere in terms of sales. However, some of these players were later found guilty of availing FAME-II subsidies in violation of the norms and saw a sharp decline in their sales. This could have been an opportunity for Ather to ramp up its sales, but it started facing strong competition from legacy automotive market leaders TVS Motors and Bajaj Auto.

While Ola Electric maintained its top position in terms of sales, with 21% market share in FY23 and 34.8% in FY24, Ather was overtaken by TVS Motors and Bajaj Auto.

The stark difference of over INR 3,000 Cr between Ola Electric and Ather’s top lines in FY24 is a direct reflection of the tepid rise in Ather’s sales over the last few years compared to Ola Electric’s.

For instance, in September 2022, Ola Electric was doing monthly sales of around 9K-10K escooters while Ather’s numbers stood at 5K-6K units around that time. A year after that, Ola Electric managed to increase its monthly sales to over 18K units in September 2023 while Ather’s numbers stood at 6K-7K units.

Cut to 2024, Ather’s vehicle registrations in August stood at around 10,902 units and Ola Electric’s at 27,547 units. 

Can Ather Catch Up With Ola Electric?

While Ola Electric’s public listing showed the investors’ appetite for EV players, it is pertinent to mention that both Ola Electric and Ather continue to be loss-making entities. While Ola Electric posted a net loss of INR 1,584.4 Cr in FY24, the loss figure for Ather stood at INR 1,059.7 Cr on a much lower revenue.

Given the public market glare, both the companies will now also feel the pressure to turn profitable, and it remains to be seen if they make any changes to their strategies to achieve this.

For now, Ola Electric is also facing intense competition and has decided to continue with its strategy of new launches and network expansion to guard its turf.

While Ather is planning to foray into the emotorcycle segment, Ola Electric has already launched its motorcycle portfolio, Roadster Series, with deliveries expected to begin in the first quarter of 2025.

However, the rising competition has impacted Ola Electric’s market share as well in recent months. In August, its market share slipped to around 31% from 39% in July. On the other hand, Ather’s market share increased to around 12% from 9% in July.

This provides an opportunity for Ather to speed up product development and increase its sales using the proceeds from the IPO to reduce the difference with Ola Electric in terms of market share. Having built its tech capabilities, the Hero MotoCorp-backed startup plans to use the funds raised from the IPO to build its upcoming manufacturing facility in Maharashtra.

In its DRHP, Ather said it plans to use INR 927.2 Cr raised from the IPO for building its electric two-wheeler factory and INR 750 Cr for scaling up its R&D.

Further, with FAME-II subsidy issues almost over and the Centre launching a new demand incentive scheme, the path seems to be clear for Ather to take aggressive bets to increase its market share. 

With EV adoption on the rise in the country, there are ample opportunities for all EV players. Only time will tell if Ather can match or get ahead of Ola Electric in terms of market share, or if the legacy players like Bajaj Auto and TVS Motor will establish their supremacy in the EV market as well.

[Edited By Vinaykumar Rai]