Shares of electric two-wheeler manufacturers, including Ola Electric and Ather Energy, jumped up to 5% in intraday trade on Tuesday, August 11, as sentiment toward the sector improved after the government extended subsidies for electric two-wheelers.
According to a notification issued late Monday, subsidies for electric two-wheelers under the PM E-Drive scheme have been extended until FY28, while the allocation for the segment has been increased by nearly ₹1,000 crore. The scheme’s total outlay has also been raised to ₹11,900 crore from ₹10,900 crore.
The allocation for ₹2,767 crore”>electric two-wheeler incentives has been increased to ₹2,767 crore from ₹1,772 crore until FY28, while the number of vehicles eligible for the subsidy has been raised to 4.57 million from over 2.4 million, according to the notification.
The Heavy Industries Ministry had urged the Finance Ministry to raise the budgetary allocation for electric two-wheelers to ₹3,000 crore until FY28, according to a Standing Committee on Industry report dated August 6.
The extension comes after the government had earlier indicated that the benefits, which were initially scheduled to end in FY26, could be extended.
Mint first reported in May that the government was planning to continue the incentives. The move also comes days after a Rajya Sabha Standing Committee urged the Heavy Industries Ministry to expedite the extension of subsidies.
The policy support comes at a time when demand for electric two-wheelers has been expanding rapidly.
Rising running costs for petrol-powered vehicles, coupled with the government’s push for EV adoption and the expansion of charging infrastructure across the country, have encouraged more buyers to shift from traditional petrol-powered two-wheelers.
According to Vahan data, electric two-wheeler sales rose to 1.46 million in FY26 from 252,787 in FY22, even as petrol two-wheeler sales declined to around 11 million from 13.2 million over the same period.
Ather outperforms Ola in Q1 as revenue surges, loss narrows
Ather Energy and Ola Electric Mobility reported sharply contrasting performances in the June quarter, with Ather delivering strong revenue growth and a significant narrowing of its loss, while Ola’s revenue continued to decline despite efforts to boost sales through discounts.
Ather Energy reported a consolidated net loss of ₹51 crore, sharply narrowing from ₹178 crore in the corresponding quarter last year. In contrast, Ola Electric’s net loss narrowed at a slower pace to ₹336 crore from ₹428 crore a year ago.
The divergence was even more pronounced on the revenue front. Ather’s revenue from operations surged 88.8% year-on-year to ₹1,217 crore, while Ola Electric’s consolidated revenue plunged 45% to ₹455 crore, marking its seventh consecutive quarter of year-on-year decline.
The difference was also visible at the operating level. Ather achieved EBITDA breakeven for the first time, marking a significant improvement in its profitability. In contrast, Ola Electric’s EBITDA margin deteriorated to negative 43% from negative 36% in the year-ago quarter.
Ola’s cash position also came under pressure, with cash flow from operations turning negative at ₹215 crore, compared with positive cash flow of ₹91 crore in the March quarter.
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