After surpassing Ola Electric in both sales and revenue, Ather Energy faces a tougher road ahead as competition stiffens and subsidies shrink
Ather Speeds Past Ola Electric in Q2
In a decisive shift in India’s EV two-wheeler market, Ather Energy has overtaken Ola Electric in both sales and operating revenue during Q2 FY26.
- Ather reported a 54% YoY increase in operating revenue to INR 898 Cr, while Ola’s revenue fell 43% YoY to INR 690 Cr.
- Including other income, Ather’s total income hit INR 940.7 Cr, a 57% YoY rise.
- More crucially, Ather’s net loss narrowed 22% YoY to INR 154.1 Cr, while Ola Electric reported a significantly higher loss of INR 418 Cr.
These numbers highlight growing demand, a leaner cost structure, and an increasingly efficient distribution strategy for Ather.
Distribution Expansion Fuels Growth
Ather’s distribution network has been its biggest competitive edge in Q2:
- From a southern stronghold, it has expanded aggressively nationwide.
- In South India, it holds 25% market share in states like Karnataka, Tamil Nadu, and Telangana.
- In West and Central India (Maharashtra, Gujarat, MP, Odisha), market share has tripled to 14.6% YoY.
- North and East India markets have doubled to 10% share, with Punjab and Rajasthan showing strong traction.
Supporting this reach is a surge in retail footprint:
- Experience centres rose from 218 to 524 in one year.
- Ather aims to hit 700 centres by FY26-end, a move likely to boost retail throughput and brand visibility.
Riding High on Unit Economics
Ather’s profitability is not just about scale — it’s about structural cost advantages and operational discipline.
- Gross margins expanded to 22%, a 300 bps YoY improvement.
- Even without subsidies, gross margins stood at 21%, up 900 bps YoY.
- Cost of goods sold per unit dropped 19%, thanks to localisation, supply chain efficiencies, and platform innovation.
As a result:
- EBITDA margin improved from -21% to -10% YoY, signaling stronger operating leverage.
- Sales volumes surged 67% YoY to 66,000 units, while revenue per retail point improved.
- Non-vehicle revenue now contributes 12% of total revenue, helping diversify the business.
Software & Services Take the Front Seat
Ather is rapidly transitioning from a hardware-focused EV brand to a tech-driven platform.
- Its proprietary vehicle software, AtherStack, is gaining ground.
- 89% of Ather owners subscribe to AtherStack Pro, providing features like pothole alerts, crash detection, and voice commands.
- This model brings in recurring high-margin revenue, boosting customer lifetime value.
In parallel:
- The company now runs over 4,300 fast-charging points nationwide.
- Battery-as-a-service (BaaS) and after-sales plans are adding to its service revenues.
These layers form the bedrock of Ather’s evolution into a technology and services platform, differentiating it from pure vehicle OEMs.
Challenges on the Horizon
Despite the strong performance, Ather’s path ahead is far from smooth:
- EV subsidies are being slashed, and reliance on them must be reduced to ensure long-term viability.
- Competitors like TVS, Bajaj, and a resurgent Ola Electric could put price pressure and challenge market share.
- Sustaining margins while growing volumes — especially in budget segments like Rizta — will require continuous product innovation and cost control.
Ather must now prove its ability to deliver consistent profitability, beyond one good quarter.
