As Ola Electric is accelerating its IPO plan, Reuters reported that the India-based electric two-wheeler (E2W) unicorn expects its revenue to quadruple in the current fiscal year despite the Indian government's decision to slash subsidies offered to E2Ws.
Reuters quoted a document saying that Ola Electric expects its revenue to rise from US$335 million for fiscal 2023 (April 2022 to March 2023) to US$1.5 billion for fiscal 2024 and targets US$220 million in operating profit for the same period. Reuters reported that the figures were estimated in April, but there had been no change since then despite the Indian government slashing subsidies for E2Ws in mid-May.
Since launching the first electric at the end of 2021, Ola Electric has been the leader in India's E2W market, with a 28.55% share for the first six months of 2023. According to Bloomberg, Ola Electric founder and CEO Bhavish Aggarwal revealed that the company's IPO would be much earlier than he had expected as it grew and matured faster than he had initially planned.
It remains to be seen whether the modifications by the Indian government about the incentives offered to E2W buyers would have a material negative impact on E2W sales. In May, India announced a reduction in the FAME-II subsidy for E2Ws registered on or after June 1, including a reduction of incentive of 10,000/kWH from previously 15,000/kWh. Additionally, the incentive cap has been scaled down from 40% of the E2W's ex-factory price to 15%. As a result of these changes, manufacturers have increased the prices of E2W products by INR10,000–30,000.
Times of India reported that, according to data from the Federation of Automobile Dealers Association (FADA), E2W sales declined from 104,829 units in May to 45,806 in June, and the growth rate went down from 147% to 3% for the same period.
Times of India quoted Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles (SMEV), saying that NITI Aayog had set progressive targets to achieve 2.3 million units adoption in the current financial year, aiming to reach 5.2 million units by fiscal 2025. However, he noted that progress has fallen far short of these targets. One contributing factor to this shortfall is the sudden reduction in subsidies.
Source: Vahan Dashboard, July 2023
