In a significant move marking a shift in strategic positioning, Hyundai Motor Company has sold its entire 2.47% stake in Bhavish Aggarwal-led Ola Electric, while Kia Motors also reduced its holding in the electric vehicle firm through a Rs 6.89 billion ($80 million) share sale, according to recent exchange filings. Hyundai exited at Rs 50.70 per share, while Kia sold part of its less-than-1% stake at Rs 50.55, both at a nearly 6% discount to the previous day’s closing price. The combined offloading reflects a cooling of South Korean auto majors’ interest in India’s nascent but volatile electric two-wheeler sector.
Highlights:
Hyundai sold its full 2.47% stake in Ola Electric.
Kia offloaded 0.6%, trimming its sub-1% holding.
Combined sale amounted to Rs 6.89 billion ($80 million).
Shares were sold at ~6% discount to Monday’s closing price.
Market Reacts Sharply; Ola Electric Shares Plunge 8% Amid Exit of Strategic Backers
Following the share sale, Ola Electric’s stock fell 8% on Tuesday, signaling investor concern over the exit of key early backers. The development comes amid persistent headwinds for the Bengaluru-based electric two-wheeler manufacturer, which has been struggling with slowing sales, rising regulatory scrutiny, and fierce price competition from established players such as TVS, Bajaj, and Ather Energy. The stock has plunged 46% since its IPO debut in August 2024, underscoring waning investor confidence in the company’s execution and growth trajectory.
Highlights:
Ola Electric stock dropped 8% post stake sale.
Shares have lost 46% since IPO in August 2024.
Investor sentiment hurt by exit of early strategic partners.
Regulatory pressures and weak sales weigh on valuation.
Investment Timeline and Strategic Fallout for Hyundai, Kia, and Ola Electric
Hyundai and Kia had collectively invested $300 million in 2019 in Ola Electric to collaborate on EV development and charging infrastructure, marking a strategic bet on India’s emerging EV ecosystem. However, the latest exits appear to mark the end of this alliance, possibly due to divergent product strategies, execution risks, or unfulfilled commercial synergies. The disinvestment suggests a reassessment by Hyundai and Kia of their long-term electric mobility roadmap in India, potentially shifting focus to their in-house EV platforms rather than partnerships.
Highlights:
Hyundai & Kia invested $300 million in 2019 for EV collaboration.
Exit likely ends strategic collaboration with Ola Electric.
Signals re-evaluation of external alliances in India’s EV market.
Hyundai and Kia may now emphasize proprietary EV rollout strategies.
Ola Electric Faces Mounting Pressure Amid Widening Losses and Forecast Cuts
In its most recent financial disclosure, Ola Electric posted a wider Q4 loss and projected declining revenue for Q1 FY26. The company is aggressively offering steep discounts in a bid to defend market share against legacy automakers. However, such tactics have severely impacted margins, leading to financial strain. Regulatory challenges around product safety and performance further complicate the company’s near-term prospects, while key investor exits exacerbate pressure on the management to restore investor trust and operational clarity.
Highlights:
Ola Electric posted larger Q4 loss and Q1 revenue decline outlook.
Heavy discounting strategy impacting profit margins.
Regulatory scrutiny adds operational risk.
Investor exits could trigger further revaluation.
