In a notable development in India’s electric vehicle (EV) sector, South Korean automakers Hyundai Motor and Kia Corporation have reduced their investments in Ola Electric Mobility Ltd. Hyundai completely sold its 2.47% stake, while Kia trimmed its 0.6% holding, in a combined share sale valued at approximately $80 million (Rs 689 crore). The transactions, executed on June 4, 2025, through India’s National Stock Exchange (NSE), reflect a strategic shift amid Ola Electric’s ongoing challenges, including slowing sales and rising competition.
Details of the Stake Sale
Hyundai Motor offloaded its entire 2.47% stake in Ola Electric, selling 10.88 crore shares at an average price of Rs 50.70 per share, totaling Rs 551.96 crore (about $65 million). Meanwhile, Kia Corporation sold 2.71 crore shares, representing a 0.6% stake, at an average price of Rs 50.55 per share, amounting to Rs 137.35 crore (approximately $16 million). The combined value of these transactions reached Rs 689 crore, equivalent to $80 million.
Citigroup Global Markets Mauritius emerged as a significant buyer, acquiring 8.61 crore shares, or a 1.95% stake, at an average price of Rs 50.55 per share for Rs 435.47 crore ($51 million). The sales were conducted at a nearly 6% discount to Ola Electric’s closing share price of Rs 53.90 on June 3, 2025, which likely contributed to a sharp market reaction.
| Details of Stake Sale | Hyundai Motor | Kia Corporation | Citigroup (Buyer) |
| Stake Sold | 2.47% | 0.6% | 1.95% (acquired) |
| Shares Sold/Acquired | 10.88 crore | 2.71 crore | 8.61 crore |
| Price per Share | Rs 50.70 | Rs 50.55 | Rs 50.55 |
| Total Value | Rs 551.96 crore | Rs 137.35 crore | Rs 435.47 crore |
| USD Equivalent | ~$65 million | ~$16 million | ~$51 million |
Background of the Investments
In 2019, Hyundai and Kia jointly invested $300 million in Ola Electric to collaborate on developing electric vehicles and charging infrastructure in India. This investment aligned with India’s push for sustainable transportation and aimed to leverage Ola Electric’s position as a pioneer in the country’s EV market. The partnership focused on creating innovative EV solutions and expanding charging networks to support India’s transition to greener mobility.
However, Ola Electric’s recent struggles appear to have prompted both companies to reassess their involvement. While Hyundai has fully exited, Kia’s current holding is now below 1%, with exact figures undisclosed as NSE data does not report stakes under 1%.
Reasons Behind the Stake Sale
Ola Electric is facing significant challenges that likely influenced Hyundai and Kia’s decision to sell. The company has experienced slowing sales growth, increased regulatory scrutiny, and fierce competition from established two-wheeler manufacturers like Bajaj Auto, TVS Motor, and Ather Energy, who have introduced competitive EV models with robust distribution networks.
Financially, Ola Electric has been under strain. For the quarter ending March 31, 2025 (Q4 FY25), the company reported a consolidated net loss of Rs 870 crore ($102 million), up from Rs 416 crore ($49 million) in Q4 FY24. Revenue for the same quarter plummeted to Rs 611 crore ($72 million) from Rs 1,598 crore ($188 million) a year earlier. For the full fiscal year 2025, Ola Electric’s net loss widened to Rs 2,276 crore ($268 million) from Rs 1,584 crore ($187 million) in FY24, with revenue declining to Rs 4,514 crore ($532 million) from Rs 5,010 crore ($590 million).
| Financial Performance | Q4 FY24 | Q4 FY25 | FY24 | FY25 |
| Net Loss (Rs crore) | 416 | 870 | 1,584 | 2,276 |
| Revenue (Rs crore) | 1,598 | 611 | 5,010 | 4,514 |
| USD Equivalent (Loss) | $49M | $102M | $187M | $268M |
| USD Equivalent (Revenue) | $188M | $72M | $590M | $532M |
To maintain its market share, Ola Electric has resorted to steep discounts, which have further strained its finances. The company has also forecasted a revenue decline for Q1 FY26, adding to investor concerns.
Impact on Ola Electric
The stake sale had an immediate impact on Ola Electric’s share price, which fell 8% on June 4, 2025, closing at Rs 49.61 per share on the NSE. Since its IPO in August 2024 at Rs 115 per share, the company’s stock has declined by 46%, reflecting investor unease about its financial health and competitive position.
Despite the sell-off, the entry of Citigroup as a buyer suggests some investor confidence in Ola Electric’s long-term potential. However, the company must address its operational and financial challenges to restore market trust.
Ola Electric’s Market Position
Ola Electric, founded in 2017 by Bhavish Aggarwal, remains India’s largest electric scooter manufacturer, holding a 31% market share in the electric two-wheeler (E2W) sector in FY24, with 329,618 scooters sold. Operating from its Futurefactory in Krishnagiri, Tamil Nadu, the company produces electric scooters like the Ola S1 series and battery cells for its vehicles.
However, recent data indicates a sales slump, with only 8,647 scooters registered in February 2025, down from nearly 34,000 a year earlier.
Consumer complaints about product quality and after-sales service have also surfaced, impacting brand sentiment. Competitors like Bajaj Auto and TVS Motor have capitalized on their established networks and reliable products, challenging Ola Electric’s early-mover advantage.
Broader Implications for India’s EV Market
The stake sale by Hyundai and Kia underscores the risks and volatility in India’s maturing EV market. While government incentives and environmental policies encourage EV adoption, companies face high capital costs for research, development, and manufacturing in a price-sensitive market. The exit of major investors like Hyundai may signal caution to others, but it also opens opportunities for new investors to enter at lower valuations.
For Ola Electric, this moment could be pivotal. The company recently settled Rs 130 crore ($15 million) in outstanding dues with vehicle dealers, a step toward stabilizing its supply chain. Improving product quality, enhancing customer service, and achieving financial stability will be critical for Ola Electric to maintain its leadership in India’s EV sector.
The divestment by Hyundai and Kia from Ola Electric highlights the challenges of operating in India’s competitive EV market. While Ola Electric remains a key player, its financial struggles and competitive pressures have prompted major investors to rethink their involvement. As India’s EV sector grows, driven by demand for sustainable mobility, Ola Electric must address its challenges to regain investor confidence and sustain its market leadership. The moves by Hyundai and Kia will likely be closely watched by industry stakeholders as indicators of the sector’s evolving dynamics.