Competitive prices against petrol-burning scooters in near future and a possible success in its battery venture make Ola Electric Mobility Ltd. “worth investing in”, said HSBC Global Research, initiating coverage on the Bhavish Agarwal-led EV maker.
HSBC has assigned a ‘buy’ rating to Ola Electric with a target price of Rs 140, marking an upside potential of 26.2%. The Ola-S1 maker is the market leader in electric scooters despite slower EV adoption and potential battery plant challenges, the brokerage noted.
EV production costs currently exceed Rs 1.1 lakh, around 2.5 times that of a scooter with internal combustion engine. Regulatory support is expected dwindle to Rs 10,000 over the next two to three years. Following this manufacturing costs have to come down to Rs 70,000 to keep EVs viable for buyers.
HSBC anticipates that improved costs of ownership and increased consumer awareness will drive further growth. The report highlighted a growing acceptance of EVs, particularly in Karnataka, Maharashtra, Tamil Nadu and Gujarat. These states account for a substantial portion of both overall two-wheeler and electric two-wheeler sales, indicating an upward trend in EV adoption.