Hyundai and Kia Slash Stakes in Ola Electric Amid $80 Million Share Sale

Hyundai Motor has exited its entire stake in Ola Electric, while Kia reduced its holding in a $80 million share sale, as the Indian electric vehicle (EV) maker faces mounting challenges, as reported by Reuters.

Hyundai and Kia’s Exit Strategy

Hyundai Motor sold its full 2.47% stake in Ola Electric at .59 USD (50.70 rupees) per share, while for .59 USD (50.55 rupees) Kia offloaded 0.6% of its shares. The combined sale of 6.89 billion rupees equates to approximately $80 million USD.

Both companies had initially invested $300 million in Ola Electric in 2019 to collaborate on EV development and charging infrastructure. However, with Ola Electric’s shares dropping 8% on Tuesday—now at a 6% discount from Monday’s closing price—and a 46% decline since its August 2024 public listing, the South Korean automakers appear to be stepping back from the struggling firm.

Ola Electric’s Market Challenges

Ola Electric, based in Bengaluru, India, is facing a challenging market environment, with the company announcing an increased fourth-quarter loss and projecting a revenue drop for the first quarter of the ongoing fiscal year. This comes amid slowing sales, regulatory pressures, and fierce competition from established two-wheeler manufacturers in India’s EV sector.

Industry Trends and Implications

The divestment highlights broader trends in the EV industry, where partnerships are increasingly tested by market volatility. Ola Electric’s focus on electric scooters and charging networks remains critical, but its ability to weather competition and stabilize finances will determine its long-term impact in the EV space.

Photo courtesy of Krasia and Ola Electric.