Warranty Cost of EV Companies: How Much of Ola Electric, Ather’s Revenue Goes to Warranties?

Warranty costs reveal how much 2-wheeler EV makers spend to cover defects, with battery warranty being the most critical and costly, covering manufacturing defects and capacity loss. 

This article explores how companies like Ola Electric Mobility,Ather Energy, and Greaves Electric manage warranty expenses, and what it reveals about product reliability and company strategy.

Warranty Spend Among Indian 2 -Wheeler EV Makers

The table below shows the warranty provisions and payments of leading Indian 2-wheeler EV makers as a percentage of their revenue in FY25. The data is from The Economic Times report.

• Ola Electric’s higher warranty costs partly stem from early quality issues in more complex products.
• Ather’s lower costs imply extensive validation and fewer defects.
• Greaves’s moderate expenses reflect simpler vehicle designs.

Factors Affecting Warranty Costs

Warranty costs in 2-wheeler EVs are influenced by several factors. Product complexity, including electronics and software, often drives higher warranty claims, while younger companies may experience more defects during initial production. 

Rigorous validation efforts can reduce claims, but longer or broader warranty terms increase financial provisions. 

Among these, battery warranty is the most critical and costly, typically covering manufacturing defects and capacity loss, forming a significant liability. 

Extended warranties, often up to 8 years, have become a competitive differentiator in the market.

Warranty Spend Among Established 2-Wheeler Players

The chart below shows how established Indian 2-wheeler manufacturers stack up in terms of warranty provision and warranty paid as a percentage of revenue in FY25.

Read More: Ola Electric Files ₹400 Crore PLI Claim On FY25 Sales Of ₹3,000 Crore.

Conclusion

Established players show warranty provisions ranging from 0.5% to 1.2% of revenue, with payments slightly lower, indicating a stable approach to defect management. In contrast, younger EV companies exhibit higher provisions, from 2% to 7.9%, with Ola facing elevated costs due to early quality challenges, while Ather and Greaves reflect more controlled expenses.

Overall, warranty spending offers insights into product quality and market competitiveness, but individual company performance varies based on their unique operational and strategic contexts.

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