Ather turns Ebitda positive: Where other electric two-wheeler makers stand

After years of prioritising growth, India's electric two-wheeler makers are focusing on improving unit economics, localisation and manufacturing efficiency

Ather Energy has become the first listed new-age electric two-wheeler maker in India to report a positive earnings before interest, taxes, depreciation and amortisation (Ebitda) margin, marking a key milestone for a sector that has long prioritised growth over profits. The Bengaluru-based company reported an Ebitda margin of 0.8 per cent in the April-June quarter, compared with a negative 15.7 per cent a year earlier. Total income rose 87.2 per cent year-on-year (Y-o-Y) to ₹1,260 crore, while net loss narrowed to ₹51 crore from ₹178 crore.

 

The milestone comes as electric vehicle (EV) adoption gathers pace across the country. India's EV registrations jumped 63.18 per cent Y-o-Y to 307,752 units in July 2026, according to a JMK Research & Analytics report. Electric two-wheelers remained the largest part of the market, accounting for 61.37 per cent of all EV registrations during the month.

 

As demand grows and manufacturers sharpen their focus on costs, localisation and manufacturing efficiency, Ather's performance raises a larger question: whether India's pure-play EV makers are finally reaching a point where scale can translate into sustainable profits. But first, let's understand why Ather's milestone matters considering the high fixed costs attached to setting up EV infrastructure.

 

Why Ather's milestone matters

 

According to company filings, Ather delivered more than 83,000 electric scooters during April-June FY27, an increase of over 80 per cent from the same period last year, while consolidated revenue rose to ₹1,260 crore. At the same time, Ebitda turned positive at ₹9 crore compared with an operating loss of ₹106 crore a year earlier.

 

In FY26, Ather had already reduced its annual Ebitda margin to negative 6.7 per cent from negative 23 per cent in FY25 as revenue climbed to ₹3,823 crore and vehicle sales increased 69 per cent to nearly 263,000 units.

 

Unlike net profit, however, a positive Ebitda does not mean a company has become profitable in the conventional sense. Ebitda focuses on the profitability of the core business by excluding financing costs, tax expenses and non-cash accounting charges such as depreciation. For manufacturing companies like EV makers, depreciation can be substantial because they invest heavily in factories, machinery, battery technology, tooling and product development. As a result, a company can report a positive Ebitda while still posting a net loss. That is where Ather stands today.

 

Even so, investors closely monitor Ebitda because it provides one of the clearest indicators of whether a high-growth manufacturing business is moving towards financial self-sufficiency. A sustained improvement in operating margins suggests that higher production volumes are beginning to absorb fixed costs, allowing each additional vehicle sold to contribute more towards profitability.

 

In Ather's case, the management attributed the improvement to a combination of strong demand, calibrated price increases, better product mix, supplier negotiations and value engineering initiatives that helped offset rising raw material costs. During the earnings call, Tarun Mehta, co-founder and chief executive of Ather Energy, said: “Recognising the strong demand that our products already had, we were able to run a really tight ship on fixed costs, particularly marketing and sales, and deliver our first-ever positive Ebitda quarter.”

 

Balancing scale and positive operating cash

 

In the early years, EV manufacturers absorb high fixed costs across relatively few vehicles. Investments in factories, engineering teams, software development, charging infrastructure, dealer networks and product development meant every scooter carried a high overhead burden. As production increases, those costs are spread across a larger number of vehicles. Economists refer to this as operating leverage, where revenue grows faster than fixed costs, allowing margins to improve.

 

This appears to be happening at Ather. In its FY26 Annual Report, the company said FY26 was the first year in which "scale and financial discipline started reinforcing each other", allowing it to generate positive operating cash flow while continuing to invest in manufacturing capacity, research and development and future platforms.

 

Ather's non-vehicle revenue, including software subscriptions, charging, accessories, spares and services, rose to 14 per cent of operating revenue from 13 per cent a year earlier. Its AtherStack Pro subscription also maintained a 94 per cent attachment rate, while a better mix of premium variants helped lift average selling prices.

 

EV makers have traditionally relied on imported batteries, electronics and other components, exposing them to currency and supply-chain risks. Ather says it has diversified sourcing, increased vertical integration and built flexibility across battery chemistries. During the June quarter, it also used supplier negotiations, value engineering and price increases to offset higher commodity costs.

 

Where do other e2W players stand?

 

Ather's positive Ebitda has raised the question that if one new-age electric two-wheeler manufacturer has demonstrated that operating profitability is achievable, how far are its competitors from reaching the same milestone?

 

Unlike Ather and Ola Electric, traditional manufacturers such as TVS Motor, Bajaj Auto and Hero MotoCorp do not depend solely on electric vehicles for profitability. Their conventional internal combustion engine (ICE) businesses generate healthy cash flows, allowing them to invest in EVs without requiring the electric business itself to become profitable immediately.

 

Ola Electric

 

Ola Electric, another listed pure-play electric two-wheeler maker, is still working towards profitability. It continues to invest in manufacturing, battery production, technology and new products. In Q4 FY26, revenue from operations fell 57 per cent Y-o-Y to ₹265 crore, while its net loss narrowed to ₹500 crore. For FY27, the company has said its priorities include recovering volumes, reducing operating expenses, ramping up its Gigafactory and moving more of its vehicle portfolio to its own battery cells. It expects orders to nearly double sequentially to about 45,000 units in Q1 FY27 and is targeting adjusted operating Ebitda and free cash flow positivity for its auto business during FY27.

 

TVS Motor

 

TVS Motor occupies a very different position. In Q1FY27, the company reported standalone Ebitda of ₹1,779 crore, up 41 per cent Y-o-Y, with an Ebitda margin of 12.8 per cent, while standalone net profit rose 51 per cent to ₹1,174 crore. At the same time, electric two-wheeler sales reached a record 130,000 units during the quarter. This gives TVS the advantage of scaling its EV business using an established manufacturing, supplier and distribution network while its wider business continues to generate profits.

 

Bajaj Auto

 

Bajaj Auto also has the advantage of scaling EVs within an already profitable automotive business. In Q1FY27, EVs, including Chetak electric scooters and electric three-wheelers, accounted for about 30 per cent of Bajaj Auto's domestic revenue during the quarter. Its standalone revenue from operations rose 37 per cent year-on-year to ₹17,244 crore, while Ebitda increased 45 per cent to ₹3,596 crore, taking the Ebitda margin to 20.9 per cent from 19.7 per cent a year earlier. Standalone net profit rose 42 per cent to ₹2,983 crore. Demand for Chetak also exceeded supply, prompting the company to raise monthly production capacity to 60,000 units from 50,000 units.

 

Hero MotoCorp

 

Hero MotoCorp is scaling its electric business rapidly, while its profitable conventional two-wheeler business absorbs the cost of that expansion. VIDA range recorded 152,000 retail sales in FY26, nearly three times the previous year's level. In June alone, registrations reached 21,812 units, up 185 per cent Y-o-Y. Hero's EV investments, however, continue to weigh on margins. In Q4FY26, it spent about ₹220 crore on the EV business, while its core ICE business delivered an Ebitda margin of 17 per cent.

 

Taken together, rising demand, better capacity utilisation, localisation and new revenue streams are creating conditions in which operating profitability becomes more achievable. The harder test now is whether Ather can sustain that performance and move from positive Ebitda to net profit, and whether other pure-play EV makers can follow without sacrificing growth. For incumbents such as TVS, Bajaj and Hero, the challenge is to turn rapidly growing EV businesses into meaningful contributors to profits. After years when India's EV race was largely about volumes and market share, the next phase will increasingly be judged by who can turn that scale into profits.