Hyundai and Kia Divest Stakes in Ola Electric Amid Mounting Challenges
Hyundai Motor has fully exited its investment in Ola Electric, while Kia has trimmed its stake, collectively raising approximately ₹6.89 billion ($80 million), according to exchange filings accessed by Reuters. Hyundai, which held a 2.47% stake, sold its shares at ₹50.70 each, while Kia offloaded 0.6% at ₹50.55 per share. The move triggered an 8% decline in Ola Electric’s share price, already under pressure since its IPO in August 2024, which has seen the stock tumble 46%.
The divestment signals waning confidence at a time when Ola Electric is struggling with slowing sales, regulatory scrutiny, and intense competition from legacy two-wheeler makers. The company recently reported widening fourth-quarter losses and expects declining revenue in the current financial quarter. Aggressive discounting to retain market share has further dented earnings.
Meanwhile, Hyundai is grappling with its own headwinds, particularly rising US tariffs. The automaker has formed a task force to assess tariff impacts and shifted some Tucson SUV production from Mexico to the US. The company’s $21 billion US investment plan includes boosting production at its Georgia facility, but executives caution that macroeconomic uncertainties and trade conflicts continue to pose serious challenges.
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