Ather vs Ola Electric: How the two VC-backed EV makers stack up against each other

Startup rivals are set to intensify the competition on Dalal Street. As public market investors are still comparing Swiggy—which is expected to file its draft papers soon— and its primary competitor Zomato, another comparison is emerging—Ola Electric versus Ather Energy.

Ather Energy, backed by Tiger Global and the National Investment Infrastructure Fund (NIIF), filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Monday. 

The company, which has Hero MotoCorp as a promoter, is raising Rs 3,100 crore through a fresh issue and offering up to 22 million shares via an offer for sale (OFS). Media reports suggest that the total size of the issue could rise to Rs 4,500 crore, with Ather aiming for a valuation of $2.5 billion.

Unlike Swiggy and Zomato, where Swiggy nearly matched Zomato in size and scale, Ather Energy has struggled to catch up with Ola Electric over the past two years. Despite being ahead in operating revenue as of March 2022, Ather has fallen behind Ola Electric, as revealed in the company's FY24 financials filed in its DRHP. Swiggy was only about 7% behind Zomato in FY24, YourStory reported last week.

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Ather Energy’s operating revenue was just one-third of Ola Electric’s, with the company reporting Rs 1,754 crore from operations in the previous fiscal year, according to its DRHP. In contrast, Ola Electric, which listed on India’s stock exchanges last month, reported revenue exceeding Rs 5,000 crore.This is a change of pace from FY22, where Ather had a revenue of Rs 409 crore, while Ola Electric generated a little over Rs 370 crore from operations. 

Ather Energy also reported a slight decline in revenue for FY24 compared to the previous year. It recorded Rs 1,781 crore in FY23, whereas Ola Electric saw a 90% increase in its FY24 revenues, jumping from Rs 2,631 crore in FY23 to Rs 5,009 crore.

Ather Energy attributed its revenue decline to reduced government subsidies and noted that the retail price of its scooters increased by Rs 20,434 to Rs 30,285, as stated in its DRHP.

“We seek to reduce our costs, improve our operational efficiencies and maintain our premium position across segments to further reduce our reliance on government incentives. Revenue from government incentives constituted only 16% of our revenue from operations in fiscal year 2024,” Ather Energy said in the DRHP.

News website Entrackr reported citing an internal document that Ather Energy posted a revenue of Rs 339 crore in the first quarter of FY25 and a net loss of Rs 183 crore. Ola Electric, on the other hand, reported a 32% jump in Q1FY25 to Rs 1,644 crore from a year earlier, albeit with a wider loss of Rs 347 crore.

Even in the first quarter of FY25, Ather reported a drop in sales compared to the same period of last year, according to its DRHP. While Ather did not disclose its Q1 FY25 numbers, it said, “the sales of our Ather 450 line of scooters were lower, resulting in lower revenues, compared to the three months ended June 30, 2023.”  

The company again attributed the slowdown to a reduction in government schemes. Ather also said that the company reduced marketing efforts on the Ather 450 line due to the Ather Rizta launch in April 2024. 

In its DRHP, Ather also said that the company will soon enter the electric motorcycle market to cater to “growing demand for electric two-wheelers.” 

Meanwhile, last month, Ola Electric also launched its first range of electric motorcycles, and priced it aggressively, starting from under Rs 80,000 apiece.

Ather’s move towards a public debut comes as the National Investment Infrastructure Fund (NIIF) increased its investment in the company last month, turning it into the country's second electric two-wheeler unicorn. The NIIF funding round valued Ather at a little over $1.2 billion. Entrackr first reported Ather’s valuation.

Ola Electric, currently having a market capitalisation of more than Rs 51,000 crore ($6.1 billion), priced its IPO at $4.8 billion, commanding a trailing 12-month revenue multiple of nearly 8. Should Ather Energy list at $2.5 billion (Rs 21,000) crore, it will command a trailing 12-month revenue multiple of almost 12.

Founded over a decade ago by Tarun Mehta and Swapnil Jain, Ather Energy was a pioneer in the electric two-wheeler industry. However, the company has recently lost ground to competitors such as Ola Electric and established two-wheeler manufacturers like Bajaj Auto and TVS, resulting in a decline to the fourth position in market share within India’s EV sector.

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric.)