Hyundai is dropping its shares from Ola Electric

The South Korean automotive group Hyundai has sold all its shares in the Indian electric two-wheeler manufacturer Ola Electric. Hyundai subsidiary Kia has also reduced its stake in the company to a minimum. The withdrawal could be due to the fact that Ola Electric has apparently put its plans for its own electric cars on hold.

Hyundai, which held a 2.47 per cent stake in the listed company, sold all of its shares at a price of 50.70 rupees per share, while Kia sold a 0.6 per cent stake for 50.55 rupees. In total, the transactions totalled 6.89 billion rupees, or around 70 million euros.

While Hyundai no longer has a stake in Ola Electric, Kia’s holding is now below the 0.5 per cent mark in any case. This is because Kia already held less than one per cent in Ola Electric – shares below this threshold do not have to be disclosed in India.

For Hyundai and Kia, the investment in Ola Electric ends with a loss: in 2019, they had jointly invested 300 million dollars in Ola Electric with the aim of jointly developing e-vehicles and charging infrastructure for the Indian market.

Ola Electric’s core business is the production of electric scooters and motorbikes. However, the company has long been toying with the idea of launching its own electric car on the market. However, these plans were apparently cancelled last year in order to focus on electric two-wheelers and the construction of its own battery cell plant in India. The withdrawal from electric cars is a possible reason for the sale of shares by Hyundai and Kia.

Ola Electric then went public in August 2024, but business is not going well: the company reported an increase in its loss in the fourth quarter and also forecast a decline in sales in the first quarter of the current financial year due to the high discounts it had to grant under competitive pressure. Since the IPO, the shares have fallen by 46 per cent, which also explains the high loss on the sale of the Hyundai and Kia shares.

reuters.com