TVS Motor Co. LTD, Bajaj Auto LTD and Hero Motocorp LTD increased the provisions of 51-107% warranty in FY25. The provisions on warranty are amounts assigned to potential defects in vehicles based on past trends and the Customer’s requirements.
Electric mobility is relatively new and early products are more likely to transmit defects, said the executives and analysts of the sectors that require companies to increase allocations to cover the guarantee demands.
Inquiries e -mail by three companies for reasons why higher allocations remained unanswered.
The numbers of the Ather LTD warranty provisions were not available. Together, Ola Electric, TVS, Bajai and Hero make up about 75% of the EV market.
Ola Electric, the largest Indian EV manufacturer in FY25, also reported shareholders after the release in January-March that it has increased the provisions of the warranty £250 crore in a quarter. While its year -round warranty funds are not available, the company has been ensured £159 Crore at the end of FY24 for warranty, according to its prospectus with red viewpoint.
“As a one -off activity, we have increased our warranty provisions … at the main level, our products Gen 1 and Gen 2, especially Gen 1 products, had higher warranty costs because it was the first generation of our platform,” said Bhavish Aggarwal, chairman and CEO of Ola Electric.
According to the industrial manager, EV is still stabilizing and companies also have a learning curve, which also had an ICE (Motor Intermastion Engine). “Moreover, the growing geographical footprint also means that the allocation of funds must be carried out according to the requirements of different markets,” said this executive worker on condition of anonymity.
TVs have seen total provisions for such warranty £88 crore to £151 crore in FY25, jump 72%. Bajaj Auto LTD has seen growth of 107% in allocation for provisions £118 crore while Hero recorded a 51% increase in guarantee allocation £630 crore.
“The provision is made for estimated vehicle warranty applications that are still under warranty at the end of the reported period. These statements are expected to be settled from the next financial year,” the TVS annual report reads with a similar description in the annual reports of other companies.
Although such an allocation accounts for less than 1% of the company’s total income, a sharp jump to warranty costs can affect operating profit margins according to analysts.
Despite the efforts of companies, this jump in the provisions of the warranty comes to improving the quality of production and deployment of systems for warranty, Anurag Singh, advisor in Primus Partners, advice.
“The primary reason for the growth is the growing proportion of electrical two -wheelers in their portfolios. These EVs usually come up with longer warranty periods and show higher claims, especially in their early production cycles,” he said, adding that because electric two -wheelers are still relatively new, initial lots often see more warranty problems.
PUNEET GUPTA, director of S&P Global Mobility, says Electric Two-Wheellers faces challenges with batteries and electronic parts that are actively working on repair. This increases the warranty costs.
“The EV supplier chain is still settling and disruptions are common. Unlike ICE vehicles where companies have a decade of experience, EVs are new and need special guarantees to build consumers’ confidence,” Gupta said.
In FY25, older companies have seen strong growth in sales of electric vehicles and exports.
TVS recorded a 29% increase in its electric two -wheel sales to 237,576 scooters, while Bajaj recorded more than 100% increase to 230,806 scooter sales. According to FADA Federation Federation (FADA), Hero Motocorp recorded a 175% increase in EV to 48,674 units.
On the company’s export queue, the growth of two -digit digits. Sales of Bajaj cars on international markets increased by 13% to 1.67 million units. Hero Motocorp recorded 44% exports to 289,668 units, while TVS Motocorp recorded a 23% increase to 1.08 million units.
All older companies have increased the launch of new electric vehicles. TVS, Bajai and Hero have organized new EV models, such as the new versions of IQUBE, Hitak and Vida, in the last year, and is also trying to click new geographical areas to continue growth.
(Tagstotranslate) Electric vehicles (T) TVS Motor Company Ltd
