This resulted in a dramatic 55% drop in sales in June 2023, exacerbating the financial pressure on Tork Motors
Tork Motors’ factory has been replaced by a deafening silence, signalling a crisis in the once-promising electric motorcycle startup. Backed by industry giants like Ratan Tata, Bharat Forge, and Ola’s Bhavish Aggarwal, Tork Motors is now teetering on the edge of collapse, as it desperately seeks to sell a stake to raise much-needed capital. The Pune-based company has approached major players in the two-wheeler industry, including Kinetic Green, Hero MotoCorp, and TVS Motor Company, with buyout proposals, according to sources close to the situation as reported by ET.
Tork Motors' predicament stems from a drastic reduction in subsidies under the FAME (Faster Adoption and Manufacturing of Electric Vehicles) scheme and a significant decline in venture and private equity funding. The company, once valued at $45 million, has struggled to sustain its operations, leading to a suspension of dealer despatches and the closure of its factory in Chakan near Pune.
Earlier this year, Tork Motors managed to secure $6 million from Maxis Capital in a fresh funding round. However, a crucial ₹50 crore funding deal fell through at the last minute, further compounding the company's financial woes. The reduction of the FAME-II subsidy last year, which slashed incentives from ₹15,000 to ₹10,000 per kWh of battery capacity and capped the maximum subsidy at 15% of the ex-factory price, led to a sharp rise in prices for electric two-wheelers. This resulted in a dramatic 55% drop in sales in June 2023, exacerbating the financial pressure on Tork Motors.
In a sobering development, Bharat Forge has written off its investment in Tork Motors, signalling a loss of confidence in the company’s future. With no new products on the horizon and its flagship Kratos R electric motorcycle struggling to maintain market momentum, Tork Motors’ survival now hinges on securing a strategic investment. The question remains: will the potential investors see value in a company on the brink, or will Tork Motors become another casualty in the volatile electric vehicle market?
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