Ola vs Ather: Who Will Rule India’s Electric Scooter Market?

Ola vs Ather: India is on the brink of an EV revolution. With a government target of 30% EV adoption by 2030, electric two-wheelers are already leading the charge. Two-wheelers account for 50% of India’s EV sales, making this a critical battleground for companies. While three-wheelers have a higher penetration rate at 50%, two-wheelers are more popular due to affordability and convenience.

The top five players in the Indian two-wheeler EV market control 80% of the market share, with Ola Electric holding 30% and Ather Energy sitting at 10%. While Ola has grown rapidly since entering the market in 2020, Ather has been quietly building a loyal customer base over the last decade.

Ather’s Strategy: Trust and Focus on Quality

1. Building Trust Through Longevity

Ather Energy started in 2013, much earlier than Ola’s 2020 foray into EVs. With a focus on quality over quantity, Ather has only launched five models since its inception. Each model has been fine-tuned for performance and reliability, helping Ather build a reputation for long-lasting products.

In contrast, Ola has rapidly expanded its portfolio, launching five scooter models and announcing plans for bikes, cars, and even three-wheelers. While Ola’s speed has helped it capture attention, it has also faced customer complaints about quality and service.

2. Premium Pricing for Premium Products

Ather has positioned itself as a premium brand, offering high-quality products at a higher price point. For instance, its scooters start at ₹1.10 lakh (ex-showroom), compared to Ola’s base model priced at ₹75,000. Despite the price difference, Ather’s focus on reliability, accurate battery range, and software updates has earned it a loyal following.

Ola’s Strategy: Scale and Innovation

1. Aggressive Expansion

Ola Electric has taken a more aggressive approach, expanding its offerings and infrastructure at lightning speed. With 800 stores across India and plans to increase to 1,800 outlets, Ola is rapidly building a presence in both urban and rural areas.

2. Vertical Integration

Ola is investing heavily in vertical integration, particularly in manufacturing lithium-ion battery cells. This approach reduces reliance on imports and gives Ola a cost advantage as it scales up. Ola has also benefited from two Production Linked Incentive (PLI) schemes, which provide government subsidies for EV and battery manufacturing.

Customer Experience: Ather’s Strength, Ola’s Challenge

1. Ather’s Customer-Centric Approach

Ather excels in creating a seamless experience for customers. With 90% of its experience centers offering service capabilities, Ather ensures that customers can access maintenance easily. It has also introduced innovative features like Google Maps integration, hill-hold assist, and a touchscreen dashboard.

2. Ola’s Service Gaps

Ola, despite its larger market share, has struggled with after-sales service. Its service-to-sales ratio is just 60%, compared to Ather’s 90%. This gap has led to customer dissatisfaction, with many buyers citing poor service as a drawback.

Distribution Models: Franchise vs. Direct Ownership

Ather and Ola have adopted contrasting approaches to distribution.

• Ather’s Franchise Model: Ather relies on a franchise model for its 220 experience centers, allowing for faster and cost-effective expansion.
• Ola’s Direct Ownership Model: Ola owns and operates all its stores, leading to higher costs but greater control. However, Ola has recently launched a partner program to allow franchising and accelerate growth.

Geographic Penetration: South vs. North

Ather has a stronghold in South India, with 68% of its sales coming from this region. However, it needs to expand to North, West, and East India to grow its market share.

Ola, on the other hand, dominates in North India, especially in states like Haryana, where it holds 81% market share.

Manufacturing and Scalability

1. Ather’s Asset-Light Approach

Ather is building its third factory in Maharashtra, with a total production capacity of 1 million units per year. However, Ather remains focused on building better components and enhancing software, avoiding investments in battery cell manufacturing.

2. Ola’s EV Hub

Ola is building a massive EV Hub, including a Giga Factory for battery cell production and a Future Factory for vehicle manufacturing. This setup will also produce over 1 million units annually but gives Ola a cost advantage due to vertical integration.

The R&D Battle

Ather spends significantly more on R&D than Ola, focusing on both hardware and software innovation.

• Ather’s R&D: 48% of its workforce is dedicated to R&D, and its R&D expenditure is 2x higher than Ola as a percentage of revenue.
• Ola’s R&D: Only 23% of Ola’s workforce is in R&D, reflecting its focus on rapid expansion rather than innovation.

The Future: Narrow Focus vs. Broad Expansion

Ather’s focused approach on scooters has allowed it to build a loyal customer base. However, it plans to diversify by launching convenience scooters and entering the bike segment.

Ola’s broad expansion strategy includes bikes, cars, and three-wheelers, along with massive investments in battery manufacturing and global markets. While ambitious, this approach could dilute its focus and strain resources.

Who Will Be India’s EV King in the race of Ola vs Ather?

The battle between Ola Electric and Ather Energy is a classic case of speed vs. precision.

• Ola’s Strengths:
  • Aggressive expansion and vertical integration.
  • Cost advantages from government subsidies and in-house battery production.
• Ather’s Strengths:
  • Superior customer experience and trust.
  • Focus on quality and innovation, backed by strong R&D.

If Ola can improve its service quality and sustain its rapid expansion, it could solidify its position as India’s leading EV player. On the other hand, Ather’s consistent focus on quality and customer satisfaction could help it gain market share over time.

Ultimately, the winner will be determined by who adapts better to India’s evolving EV market. Ather’s premium positioning and trust-building strategy make it a strong contender, but Ola’s scale and innovation could keep it ahead in the race.