Electric 2-wheeler Cos Await Surge in Warranty Claims

India's top two-wheeler manufacturers are setting aside significantly larger sums to cover their warranty costs.

- Ayaan Kartik

A key reason: The rising share of electric vehicles in their overall sales.

TVS Motor Co. Ltd, Bajaj Auto Ltd, and Hero MotoCorp Ltd increased warranty provisions by 51-107% in FY25. Provisions for warranties are sums allocated for potential defects in vehicles, based on past trends and analysis of customer claims.

Electric mobility is relatively new, and early products are more likely to carry defects, industry executives and analysts said, requiring companies to increase allocations to cover warranty claims.

Queries emailed to the three companies on the reasons behind higher allocations remained unanswered.

Warranty provision numbers for Ather Energy Ltd were not available. Put together, Ola Electric, TVS, Bajaj, and Hero constitute about 75% of the country's EV market.

Ola Electric, India's largest two-wheeler EV maker in FY25, had also informed shareholders after the release of January-March results that it has increased the warranty provision by ₹250 crore in the quarter. While its full-year warranty funds are not available, the company provisioned ₹159 crore at the end of FY24 for warranties, according to its Red Herring Prospectus.