 "electric two wheeler")
Despite sharp discounts across models to raise volumes in the past two months, electric two wheeler sales month-on-month are stagnating. Registrations to the end of February touched 79,139, marginally lower than 79,214 in January, based on VAHAN data. Only seven companies achieved over 1,000 registrations in February. This is disappointing for a market filled with 178 players who were hoping to leverage the FAME subsidy, but whose future extension is uncertain. The top four electric two-wheeler manufacturers —Ola, TVS, Bajaj and Ather — account for over 86.45 per cent of the market.
Among electric motorcycle players, the struggle to stay afloat is still on. Tork, Revolt and Ultraviolette managed to register collectively only 649 vehicles in the month and Revolt accounted for the bulk of them. The penetration of electric two-wheelers in the incremental total registrations (ICE and electric) has been hovering at 5.5 to 5.6 per cent in the last two months.
Ola has applied to raise Rs 5500 crore through an IPO. It has been pushing volumes by offering substantial discounts across all its models and introducing cheaper models starting at Rs 79,999. It has also dropped prices by Rs 25,000. These decisions helped Ola stay at the top and far ahead of the competition.
In February, it hit registrations of 33,316 - its highest ever - but only marginally up by 3 per cent from January. Yet it controlled 42 per cent of the electric two wheeler market. The incumbents, Bajaj and TVS combined, have a 33 per cent share.
Ather has also lowered its prices though this not has not increased its volumes which ended lower in February than in January. The company is also planning an IPO sometime this year, is in the process of appointing its merchant bankers, and hopes for a valuation of $2 billion.
Some incumbent competitors argue that discounting is an expensive way to build volumes and can kill a brand. It should certainly not be done month-on-month, they say.
“Lower prices for a durable every month could be a brand suicide and we do not want to do so,” said the top executive of a two wheeler company.
Also noteworthy is that the gap between the two incumbents is narrowing. In February, Bajaj Auto achieved 11,618 registrations as against TVS’s 14,499 - a gap of 2881 vehicles. In January the gap was far wider.
