EV Boom Reshapes Auto Stocks: Ola Swings, Ather Gains and Bajaj Auto, TVS Motor Gradually Re-Rate

India’s electric vehicle (EV) story is beginning to redraw the contours of auto stocks.

While pure-play EV stocks Ola Electric and Ather Energy continue to see volatile, sentiment-driven moves, traditional two-wheeler makers Bajaj Auto and TVS Motor Company are witnessing a more gradual re-rating, as their EV businesses begin to contribute meaningfully to growth narratives.

Ola’s Volatility, Ather’s Steady Rise Set the Tone

Recent trading sessions have highlighted the divergent nature of EV investing.

Shares of Ola Electric have been highly volatile, falling nearly 8 percent after a sharp rally of about 80 percent in the previous seven sessions, as investors rushed to book profits. The stock’s movement underscores its sensitivity to news flow and sentiment, with concerns around profitability, execution and market share still lingering. The stock has risen around 13 percent this year, going by data till Friday last week.

In contrast, Ather Energy, which was up 8 percenttoday and is up about 14 percent across the previous seven sessions, has posted a bigger rally, gaining roughly 30 percent so far in 2026. The rise has been supported by steady demand, network expansion and favourable policy cues, signalling stronger investor confidence in execution.

Spillover Into Legacy Auto Stocks

The divergence between Ola and Ather is not just limited to their own share prices—it is increasingly shaping how investors view EV exposure in legacy companies.

Stocks of TVS Motor Company and Bajaj Auto have seen improving sentiment in recent months, as their EV portfolios—iQube and Chetak, respectively—gain traction in the domestic market.

Analysts say investors are beginning to assign a premium for EV optionality within these companies, a shift from earlier perceptions where EV investments were seen largely as cost centres.

Market Share Shifts Favour Incumbents

Execution challenges at Ola Electric have also created opportunities for legacy players.

Issues around service, pricing strategy and operational consistency have led to a gradual erosion in Ola’s early market lead, allowing companies like TVS Motor Company and Bajaj Auto to capture incremental market share.

According to data from the government-run Vahan portal, Ola’s share of electric two-wheeler market has fallen sharply from 36.7% in 2024 to 16.1% in 2025, signalling a steep erosion of its early dominance. In contrast, traditional automakers have rapidly gained share. TVS Motor Company has emerged as a leader with a market share of around 24%, while Bajaj Auto comes next with around 22% share. Ather Energy’s market share went from 11.3 percent in 2024 to 16.2 percent in 2025.

The numbers underline a broader transition in the EV space—from a startup-led, hyper-growth phase to a more execution-driven market, where established distribution networks, service capabilities and brand trust are allowing incumbents to steadily capture share from early leaders.

EV as a Valuation Support, Not a Driver Yet

Despite improving sentiment, EV businesses are not yet the primary drivers of earnings for legacy automakers.

For both TVS Motor Company and Bajaj Auto:

• EVs account for a relatively small share of total revenues
• Internal combustion engine (ICE) vehicles continue to dominate profitability
• Margins in EV segments are still evolving

As a result, the market is rewarding these stocks with gradual re-rating rather than sharp rallies, unlike the moves seen in pure-play EV companies.

A Shift in How the EV Story is Priced

The broader takeaway from recent market moves is a shift in how investors are pricing the EV opportunity.

Earlier, the EV theme was largely synonymous with high-growth, high-risk names like Ola Electric. Now, the focus is expanding to include execution capabilities, scalability and balance sheet strength.

In this framework:

• Pure-play EV stocks offer high upside but high volatility
• Legacy automakers offer measured growth with lower risk

Source: NSE