Editorials -

India’s electric vehicle (EV) industry is undergoing a significant structural transformation driven by economic, regulatory, environmental, and technological factors. Sustained petrol prices in the range of approximately ₹105–₹115 per litre across major cities have materially improved the cost competitiveness of electric mobility, particularly in the e-2w segment. This shift is reinforced by policy interventions such as FAME-II, the Production Linked Incentive (PLI) scheme, reduced GST on EVs, and state-level subsidies, all of which have accelerated adoption.
The e-2W segment has emerged as the fastest-growing category, with Ather Energy, Ola Electric, and TVS Motor Company, Bajaj Auto competing through distinct strategic models. Ola Electric had a headstart in the e-2w segment by following a scale-driven, low-ASP strategy targeting mass-market penetration, with estimated 30–35% market share during the 2022-2025 period; however, faced with severe margin pressure due to aggressive pricing, quality issues, poor after-sales, and compliance issues. TVS Motor leveraged its legacy ICE cash flows and extensive dealership network, positioning the iQube as a reliable, value-oriented urban mobility solution. In contrast, Ather Energy operates in the premium ecosystem space, with a software-led positioning, higher ASP product mix, and integrated charging infrastructure.
Ather Energy recorded sales of approximately 2.63 lakh units in FY26, growing nearly 65–70% year-on-year, with revenue crossing ₹3,823 crore and taking #3 slot in unit sales rank during April 2026. Ather’s estimated high-teen market share is supported by operating leverage gains and scale efficiencies resulting in narrowing EBITDA losses, though profitability remains constrained due to battery import dependence and continuous investments in retail and charging expansion, creating a persistent margin–scale trade-off.
India’s E2W ecosystem remains at an early stage, with lower ASP realization, limited software monetization, and weaker battery vertical integration. While global EV players (predominantly in the e4w space) benefit from in-house cell production and global scale, Indian players continue relying heavily on imported components and subsidy-driven demand cycles.
With over 6,000 charging points, 700+ retail centres, and a ₹1,600+ crore cash reserve from IPO proceeds, Ather is building long-term competitiveness. It’s strategy is anchored in building a vertically integrated, technology-driven EV ecosystem where hardware, software, and infrastructure function as a unified model. Unlike traditional OEMs, Ather’s positioning is defined by ecosystem assets such as charging infrastructure, connected software platforms, retail experience centres, and localized manufacturing.
This integrated approach enhances customer retention, reduces range anxiety, and improves lifetime value per user, strengthening long-term unit economics.
In FY26, the company invested approximately ₹450–500 crore in charging infrastructure, adding nearly 1,100–1,200 fast-charging points and scaling the Ather Grid network to over 6,000 stations nationwide. Although capital-intensive, early usage trends in urban clusters indicate improving utilization and faster adoption cycles, reducing reliance on home charging ecosystems.
Financially, FY26 saw sales of ~2.63 lakh units, up 69% YoY, with revenue rising to ₹3,823 crore. Market share increased to ~18.6%, reflecting stronger brand pull and improved distribution efficiency. Operating leverage improved significantly, with fixed-cost absorption reducing operating expenses by an estimated 400–500 basis points as a percentage of revenue.
However, profitability remains sensitive to product mix, particularly the shift toward the Rizta platform, which expands scale but mildly compresses ASPs. This creates a clear margin–scale trade-off, where volume growth is partly offset by pricing pressure and battery cost inflation.
Compared to Ola Electric (scale-led, low-ASP model) and TVS Motor (legacy distribution-led model), Ather occupies a premium ecosystem position aligned more closely with global EV ecosystem players, though monetization efficiency remains at an early stage.
Ather’s product portfolio includes the Ather 450X and Rizta platforms, representing a dual-segment strategy. The 450X anchors the premium performance category with higher ASP contribution, while the Rizta expands reach into the mass-premium family scooter segment. This shift has diversified demand beyond metro-centric premium users into Tier-2 and semi-urban markets, improving volume scalability while slightly moderating ASP realization.
However, Rizta-led expansion created mild ASP compression, partially offset by scale efficiencies. EBITDA losses narrowed but remained under pressure due to continued investments in retail, technology, and charging infrastructure.
Market share improved to ~18–19%, reinforcing Ather’s position among leading E2W manufacturers and reflecting stronger brand equity and ecosystem adoption.
FY27 appears to carry forward the momentum of the past 12 months driven by rising EV adoption, geographic expansion, and broader consumer acceptance of E2Ws.
If FY26 growth was primarily volume-led through the Rizta platform, expanding Ather’s addressable market from premium urban consumers to mass-premium family scooter buyers, improving conversion in price-sensitive regions; we believe FY27 would be more about combination of replacement of ICE 2w due to fuel issues and usage economics
Geographic diversification reduced South India’s contribution from ~45–50% to ~30–35%, with stronger traction in Maharashtra, Gujarat, Madhya Pradesh, Odisha, Rajasthan, and Chhattisgarh.
We expect profitability improvements to continue driven localization, procurement efficiencies, and operating leverage. However, battery import dependence and competitive pricing continue could weigh on margins in the near term.
Adjusted gross margin reached ~₹925 crore, while EBITDA losses narrowed but remained under pressure due to ongoing investments in retail expansion, software development, and charging infrastructure. The upcoming EL platform (₹1–₹1.25 lakh) and Factory 3.0 at AURIC are expected to expand capacity beyond 1 million units annually, improve cost efficiency, and strengthen vertical integration.
India’s e-2w industry is rapidly expanding, led by Ather Energy, TVS Motor Company, Bajaj and Hero Motocorp with each following distinct strategic models based on pricing, scale, and technology intensity.
Ola Electric follows a volume-driven disruption strategy focused on aggressive pricing and mass-market penetration through its Futurefactory. It holds ~30–35% market share in FY26, with ASPs ranging ₹85,000–₹1.10 lakh. However, this low-ASP model results in margin pressure, higher acquisition costs, and service challenges. [Tabular format]
TVS Motor represents a stability-driven, legacy-backed model leveraging its ICE cash flows and nationwide dealership network. Its iQube platform targets urban and semi-urban consumers with ASPs of ₹1.10–₹1.45 lakh. TVS holds ~24–27% market share, supported by strong brand trust and distribution depth.
Ather Energy operates in the premium-technology segment with ASPs of ₹1.25–₹1.55 lakh. Its differentiation is built on software-defined vehicles, OTA updates, connected dashboards, and ecosystem integration through Ather Grid, which spans over 6,000 charging points. It sold ~2.63 lakh units in FY26, capturing ~18–19% market share.
Structurally, India’s electric vehicles industry still lags global EV leaders in areas such as battery vertical integration, software-defined ecosystems, global supply chain control and new technology adoption. While most Indian OEMs rely on imported lithium-ion cells, limiting cost efficiency and innovation speed. Software monetization and autonomous capabilities remain underdeveloped compared to global peers.
However, that is about to change over the near term. Dedicated, software platform and its development; investments in battery cell manufacturing, local sourcing of critical materials and end-to-end supply chain building is in the work-in-progress mode. We estimate that that most of these initiatives will bear fruit over the next 12-18 months and EV adoption acceleration reaching an inflection point is nearer than most people estimate. We believe that the current oil / energy (Mid-East crises) supply worries could be that trigger which brings that inflection point closer and bring the industry to profitability sooner and faster.