A clash of strategies in India’s EV race

“Parliament, ultimately production, ultimately very valuable. This last step optimization,” Mint In an interview. “Much richer optimization IP (intellectual property) and brand today. That’s why we will always put our money there.”

Mehta, General Manager of the Electric Scooter manufacturer based on Bengaluru, said, “Unlike some of our peers in the sector, we are the great believers in your basic product architecture that real money will be given or lost.

The problem of building everything in the automobile industry after preventing the supply of rare soil magnets, an important component in China’s engines. The producers of both fossil fuel engines and homes marked concerns and prepared plans to create alternatives or their own supply chains. However, tensions between India and China began to alleviate the automotive sector of India by providing a hope of $ 240 billion in 2024, according to government estimates. The country’s home market, large view research forecasts are worth $ 8.4 billion.

“Considering those in the real world, vertical integration would not solve it (rare soil problems), Meh Mehta said. “If you have to produce rare soil motors in the company, you would still need a rare world from China. And if you want to produce ferritis engines, there are suppliers that build ferritis engines. You don’t need to be vertically integrated to use Ferritis engines.”

Cost Treatment

Mehta’s opinion contrasts with Bhavish Aggarwal, the president of Ater’s Revolution of Towns Ola Electric. Aggarwal wants to do everything in the company from ferritis engines to lithium ion cells. Although there is a supplier ecosystem for many components, Indian has not made progress on lithium ion cells, but only Ola Electric has produced such cells.

However, as Mehta is known to have weak margins of the enterprise, he doubts whether investing in cells will be good for the financial health of the company.

“In a year, 3 to 4 Lakh electric scooter scale, this cell production scale was rarely profitable,” he said. “Too much cell production is a difficult piece. You see gross profit margin improvement. But your production cost is so high that your EBITDA effect is much worse.”

FAVÖK – Interest, Tax, Depreciation and Pre -Fire Department Gains – a measure of a company’s business profitability.

However, during the annual event of Ola Electric on August 15, Aggarwal said that domestic cells will help to reduce the cost of supplying the key component of the company and offer lower prices for consumers.

“Consolidated level, producing our own cells at the level of 5 GWh, is cheaper than supplying our own cells at the level of 5 GWh,” aggarwal said during the company’s call for earnings on July 14th. He said.

Aggarwal also stressed that the vertical integration strategy is different from how traditional automobile businesses work.

“Our strategy in this business was to create more production vertical integrations, to develop more in -house technology, and to directly create a channel for the customer for customer interaction with the brand.” He said. “And in this third, we believe that we continue to combine our competitive advantage as officials continue to create traditional automobile business models. And this competitive advantage can now be seen in the balance of skin that can deliver.”

Sustain more than one supplier

Atter believes that he has the right partners in China instead of investing in factories. However, it continues to look outside to diversify the supply chain and protect its bets from more than one partner.

Atter’s CEO, “You want to risk your cells. In parallel you want to protect using multiple technology, this can only happen if you work in parallel with more than one partner of these technologies,” he said. “In -house cells lock you in a technology. And this technology still has raw materials that will still have external addiction.”

The approaches of both companies have their own risks and advantages and will depend on factors such as choice, capital and market position.

Nomura Research Institute Group President Harshvardhan Sharma said, “Very deep pockets and players with a long investment horizon can justify vertical integration, while others can benefit from global ecosystems,” he said. “Companies competing on price and scale may need integration. Those who compete in experience and agility may give priority to partnerships.”

According to Sharma, home players globally integrate hybrid models such as Tesla selectively, while they still work closely with Panasonic, CATL or LG. Original equipment manufacturers such as BYD develop components within the company and also source from external suppliers.

Profit pressure

Both the antest and Ola Electric are examined how much profit they can make the investor. While Ater boast of healing margins, Ola Electric recently suggested that instead of maintaining aggressive growth, it would shift the focus to profitability.

2025 financial year, Ather’s loss narrowed La812 CRORE La1,060 CRORE, OLA Electric’s Loss La1,584 CRORE La2.276 Crore. While ATER’s operating profit margin rose from -39% to -26%, Ola’s margin fell from -25% to -38%. So while losing anteter LaEach 26 La100 revenues are obtained. La38.

However, Electric’s automobile segment was EBITDA positivity for June, the first for any electric scooter manufacturer in India.

Both companies are competing for leadership in India’s electric two -wheel market. According to data on the government’s Vahan portal, Ola Electric’s sales remained almost 58,000 in the quarter, which ended in June.

Ather, this week, at the annual community day event in Bengaluru, introduced many features to be introduced as part of the Athestack 7 update. Atter, from the AI ​​features activated in the sound, to warnings about the pits on the roads, put bets on technology to attract new customers.

He also introduced a new hand vehicle platform where future products will be built.