India extends EV two-wheeler subsidies to FY28, lifting Ola Electric and Ather shares
PM E-Drive’s outlay has risen to ₹11,900 crore, with electric two-wheeler incentives expanded to ₹2,767 crore and eligibility raised to 4.57 million vehicles. Ather posted 88.8% June-quarter revenue growth and EBITDA breakeven, while Ola’s revenue fell 45%.
The development
India extended PM E-Drive electric two-wheeler subsidies through FY28 and raised funding, boosting Ola Electric and Ather shares. Ather reported strong June-quarter revenue growth and EBITDA breakeven, while Ola’s revenue decline and negative operating cash flow persisted.
The numbers
- PM E-Drive total outlay increased to ₹11,900 crore from ₹10,900 crore
- Electric two-wheeler incentive allocation increased to ₹2,767 crore from ₹1,772 crore
- Eligible electric two-wheelers increased to 4.57 million from over 2.4 million
- Ather Q1 revenue rose 88.8% YoY to ₹1,217 crore; net loss narrowed to ₹51 crore from ₹178 crore
- Ola Q1 revenue fell 45% to ₹455 crore; net loss narrowed to ₹336 crore from ₹428 crore
- EV two-wheeler sales rose to 1.46 million in FY26 from 252,787 in FY22
Why it matters to operators and investors
Subsidy-backed market expansion makes distribution, charging, financing, and after-sales partnerships more valuable, with Ather appearing the stronger near-term strategic partner than Ola.
What to watch next
- Monthly VAHAN electric two-wheeler registrations and each OEM's market-share trend.
- Actual PM E-Drive disbursement pace, per-vehicle incentive rules and whether the enlarged allocation is exhausted ahead of FY28.
- Ather's ability to remain EBITDA-positive while funding network expansion and promotional activity.
- Ola's quarterly revenue trajectory, delivery volumes, cancellation rates, service metrics and dealer-network stability.
- Discount intensity from legacy OEMs and resulting changes in average selling prices and gross margins.
- Battery-cell pricing, localization progress and any changes to subsidy eligibility tied to domestic value addition.
- Ather is likely to accelerate retail-store and service-network additions, expand financing partnerships and prioritize higher-volume scooter variants.
- Ola is likely to increase promotional pricing, dealer incentives and service remediation while pursuing product refreshes to regain registrations.
- Competitors such as TVS, Bajaj and Hero MotoCorp are likely to defend share with subsidized entry models, bundled financing and faster dealer electrification.
- Battery, motor, controller and charging-service suppliers may increase capacity commitments as eligible vehicle volumes rise to 4.57 million.
- Lenders and NBFCs may broaden EV-specific loan programs as residual-value confidence and subsidy visibility improve.
The counter-case
Extended subsidies may pull forward demand rather than create durable adoption, leaving manufacturers exposed when support tapers. Higher eligibility and outlay can intensify price competition, compress margins, and favor firms with stronger distribution and balance sheets rather than translating into sector-wide profit growth. Ather’s single-quarter breakeven and rapid revenue growth do not establish sustained profitability, while Ola’s 45% revenue decline suggests subsidies alone cannot offset execution, product-quality, service-network, and brand-trust issues.