Rare earth magnet supply issues impact August e-scooter rankings: TVS on top, Ather switches gear to race past Ola Electric

Bengaluru: The prolonged shortage of rare earth magnets that disrupted electric vehicle production has led to a reshuffle in the market ranking of twowheeler makers, although TVS Motor held on to its lead. Bengaluru-based Ather Energy, which went public in May, has overtaken Ola Electric in monthly sales volumes, while Bajaj Auto slipped to fifth, according to data from the Vahan portal. In the first 27 days of August, Ola Electric sold 13,688 vehicles for a 17.3% market share, holding on to third position. Ather Energy moved up to the second in electric two-wheelers (E2Ws) with a 17.9% share, while TVS Motor led with a 24.8% share.

Bajaj Auto, which had earlier indicated that August could be a “zero month” for its Chetak electric scooter and GoGo three-wheeler due to rare earth magnet supply constraints, sold 8,940 vehicles, taking an 11.3% share and falling to fifth. Hero MotoCorp inched ahead to fourth with a 13.4% share. “I think the rare earth magnet and supply chain issues are likely to be behind us very soon, because we have more or less sorted it out with China,” VG Ramakrishnan, managing partner at Avanteum Advisors LLP, told ET.

“Once the supply chain stabilises, companies like Bajaj will go back to their original position, as they were in July,” Ramakrishnan said. Earlier this week, Ola Electric said it had secured compliance certification under the production-linked incentive (PLI) scheme for its Gen 3 scooter portfolio. The approval makes the company eligible for incentives of 13-18% of the determined sales value of these scooters until 2028. Ola Electric said this will support its path to profitability from the second quarter of FY26, as the incentives directly strengthen its cost structure and margins. “There are both positives and negatives for Ola Electric at this point. The PLI certification is a positive, but the customer confidence dip is a negative, as they have lost significant market share,” Ramakrishnan added. On Monday, shares of Ola Electric Mobility closed at Rs 50.8 on the BSE, below the issue price of Rs 76.

OLA'S PLIGHT
Ola Electric has been grappling with a range of challenges, including scrutiny over sales data discrepancies, vehicle quality concerns and missing trade certificates at several of its retail outlets. During its June quarter earnings call, Ola said it was shifting focus to capital discipline and risk management. That marked a move away from breakneck expansion. It reported a net loss of Rs 428 crore in the June quarter, wider than Rs 327 crore a year earlier and narrower than the Rs 870 crore loss in the January-March period. Operating revenue stood at Rs 828 crore, nearly half the Rs 1,644 crore reported in the year-ago period.