Electric Vehicle Manufacturers Broaden Focus Amid Improved Margins and Reduced Losses

India's Electric Two-Wheeler Market Shows Signs of Recovery

India's electric two-wheeler market, which has been experiencing intense competition and slowing subsidy support, is showing signs of recovery. Listed electric vehicle (EV) makers are highlighting improvements in profitability metrics, such as margins, losses, and cash generation, as investors shift focus towards sustainable business models rather than pure volume growth.

Profitability Metrics Improve

Ola Electric Mobility and Ather Energy reported notable gains in profitability metrics during the financial year 2026 (FY26). TVS Motor continued to expand its business, underlining continued growth despite intense competition and slowing subsidy support. The improvement suggests that scale, localisation, and tighter cost controls are beginning to offset some of the pressures that have weighed on the sector over the past two years.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Deliveries Show Mixed Trends

Ather Energy sold 2.63 lakh electric two-wheelers in FY26, up 69 percent from around 1.56 lakh units in FY25. The company's market share rose to 18.6 percent from 11.5 percent. In the March quarter alone, Ather delivered a record 83,418 vehicles, a 76 percent year-on-year increase that helped drive revenue growth and margin expansion.

TVS Motor sold 3.71 lakh electric two-wheelers during FY26, up 33 percent from the previous year. Ola Electric, however, delivered 1,73,794 vehicles in FY26, down from 3,07,846 vehicles in FY25, reflecting a difficult year marked by service-related disruptions and a broader business reset.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Margins Improve, Losses Narrow

Bigger gains were on the profitability front. Ola Electric reported its first operating cash flow-positive quarter in Q4. Automotive gross margin expanded to 38.5 percent from 18.4 percent a year earlier. Consolidated net loss narrowed 42.5 percent to Rs 500 crore from Rs 870 crore in the year-ago period, while total expenses fell 58.2 percent to Rs 546 crore.

Cost Discipline Takes Centre Stage

Tighter cost control and operational efficiency was the common theme for EV makers in FY26. Ola Electric reduced total expenses by 58.2 percent to Rs 546 crore in Q4, while operating expenses fell to Rs 428 crore from Rs 844 crore. Consolidated cash flow from operations improved to negative Rs 775 crore in FY26 from negative Rs 2,391 crore in FY25, with the March quarter turning positive at Rs 91 crore.