Bhavish Aggarwal-run Ola Electric, which recently entered the public market, is fast losing market share in the domestic electric two-wheeler space to its rivals amid increasing competition, and market analysts have warned investors to remain "cautious" with its volatile stock.
A latest Jefferies report said that TVS and Bajaj have expanded their portfolios with more affordable electric two-wheelers. This shift has allowed them to gain between 4% and 7% of the market share, respectively, with TVS now holding 19% and Bajaj 18%.
According to the report, Ola Electric's market share in the electric two-wheeler market has slipped from 49% in the June quarter (Q1 FY25) to 33% in August on a month-to-date basis.
Market watchers said while the long-term potential of Ola Electric, especially given the EV market's favourable outlook, might be appealing, the current valuation appears to be quite speculative.
"Investors should be cautious, especially given the company's ongoing losses and the high volatility in its stock price. For new investors, it may be wise to wait for a more stable entry point or consider the stock as a long-term play with a high risk-reward ratio," said Saji John, senior research analyst at Geojit Financial Services.
According to analysts, the launch of lower-priced electric vehicles and an aggressive discounting play by legacy players TVS and Bajaj are helping them win the market share from their rival Ola Electric.
Ola Electric shares further declined to close at INR 126.26 apiece on Friday. From its all-time high, the scrip is now trading about 20% lower.
To boost its prospects, the company last week introduced electric motorcycles across various price ranges.
While motorcycles dominate the broader two-wheeler market in India, their share in the EV segment is currently just 1%.
Jefferies highlighted that the success of Ola Electric's new model will hinge on its on-road performance and the overall profitability of electric bikes in India. Motorcycles dominate the Indian two-wheeler market, accounting for 63% of total volumes.
Jefferies anticipates a rise in the electric two-wheeler market share from the current 5.6% to 13% by fiscal 2027.
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