Ultraviolette Automotive: Growth and Challenges in Electric Mobility

Ultraviolette Automotive, a leader in electric mobility, experienced a remarkable 115% increase in its operational scale for the fiscal year ending March 2025. Nevertheless, the company also saw its losses rise by 88%, exceeding the Rs 115 crore mark during the same period, largely due to a more than double increase in the costs of parts, batteries, and other essential inputs. The company’s revenue from operations surged to Rs 32.3 crore in FY25, up from Rs 15 crore in FY24, as per its annual financial documents retrieved from the Registrar of Companies (RoC).

Performance and Sales Data

Established in 2015 by Narayan Subramaniam and Niraj Rajmohan, Ultraviolette creates high-performance, desirable electric two-wheelers. The sale of these vehicles was the principal revenue source for the company in the recent fiscal year. According to Vahan records, the total number of vehicles sold by the company in FY25 was 547.

Expenditure Trends

Interestingly, materials did not constitute the largest expense for the two-wheeler manufacturer. Employee benefit expenses surfaced as the foremost cost component, accounting for 31% of total expenditures. This expense escalated by 28% to Rs 59 crore in FY25. Additionally, the firm invested Rs 7.6 crore in research and development, alongside Rs 7 crore dedicated to IT expenses during the same fiscal period.

The cost of materials, however, surged 2.2 times to Rs 33 crore in FY25 compared to Rs 15 crore in FY24. Furthermore, advertising expenditures rose dramatically, increasing 4.8 times to Rs 29 crore in FY25. The company’s depreciation expenses were reported at Rs 27.5 crore. Overall, total expenditures escalated by 77% to Rs 189 crore in FY25, up from Rs 107 crore in the previous fiscal year.

Impact of Expenses on Profitability

As expenses significantly outpaced revenue growth, Ultraviolette’s net loss rose by 88%, reaching Rs 116 crore in FY25 from Rs 61.6 crore in FY24. The company’s Return on Capital Employed (ROCE) and EBITDA margins widened to -40.88% and -396.75%, respectively.

Examining unit performance, the firm expended Rs 5.85 to generate one rupee in FY25, an improvement from Rs 7.13 per rupee of revenue in the preceding year. Ultraviolette concluded the fiscal year with Rs 46 crore in cash and bank balances and current assets amounting to Rs 170 crore.

Investment and Market Position

Various sources indicate that Ultraviolette has amassed a total funding of $100 million to date, with TVS Motor Company and Mudhal Partners serving as its principal investors. Co-founders Narayan Subramaniam and Niraj Rajmohan collectively hold 29% ownership of the company.

Aspirational Brand Strategy

In the context of aspirational vehicles, the emphasis is not solely on premium pricing. These brands cultivate aspiration through impactful imagery, testimonials, and strong personalities. In the current landscape, a stroke of luck from a viral social media campaign might also be beneficial. However, this alone may not suffice, as Indian consumers, across various categories, remain acutely aware of factors like after-sales services and resale value.

Ultraviolette appears to require improvements in this domain, still grappling with significant financial losses. Despite the awareness among its investors, the company needs to take calculated risks regarding marketing themes, endorsements, or associations to penetrate the market for its high-priced motorcycles. If investors are confident in the product’s potential, they must provide the required support to accelerate the path to success.