Withdrawal of subsidies and unavailability of new funding have presented significant challenges for Tork Motors
While the electric two-wheeler segment continues to register robust growth, some startups are staring at an uncertain future. A relevant example is Pune-based EV startup, Tork Motors. The company currently offers only a single product – Kratos R electric motorcycle.
Dealers file police complaint
According to the dealers, dispatches from Tork Motors have stopped since December 2023. Now that more than 7 months have passed, the dealers have collectively filed a police case. They were promised fresh dispatches by the end of June, but there was no further update. Dealers have reported that the company has been unresponsive and most customers have cancelled their bookings. It is reported that the manufacturing unit located at Chakan has been inoperative since last year.
Assistant Police Inspector of Pimpri-Chinchwad, Kiran Pathare, has said that an investigation is currently in process based on the dealers’ complaint. However, more details were not provided, as the matter is confidential. Pathare said that action will be taken by next week.
No salary for 7 months
As per reports, employees of Tork Motors have not received salaries for the last seven months. Tork Motors recently sent emails to its employees, serving a ‘Notice of Role Dissolution and Employment Termination’. The email mentions that the company has carried out an in-depth assessment of the existing organizational structure and future plans. Based on that, the company feels the need to dissolve certain roles within the organization.
Tork Motors has officially declared employee termination, from July 31, 2024. The company says that this move will help align the workforce with the strategic goals of the organization. The employees will be served relieving letters soon.
Bharat Forge writes off investment
One of the key reasons for Tork Motors’ troubles is the inability to secure fresh investments. It was reported last month that Tork could get around Rs 50 crore via a fresh funding round. However, the deal was reportedly cancelled at the last moment.
In the latest development, Bharat Forge has written off its investment in Tork Motors. This was revealed during the media interview about the company’s Q1 earnings. Bharat Forge, via its wholly owned subsidiary Kalyani Forge, owns 64.29% equity stake in Tork Motors. Bharat Forge has been investing in Tork Motors over the last 4-5 years. However, with the reduction in FAME subsidy, Tork Motors’ profitability was adversely impacted.
Bharat Forge says that it is only an investor in Tork Motors and does not manage the company. If there are doubts about the company’s future, it will be better to accept that and move on. Bharat Forge has stated that there are no plans to make fresh investments available to Tork Motors. They are working with Tork to ensure an orderly wind up.
Customer woes
Most Tork customers have positive things to say about their electric motorcycle. However, due to the uncertainties, Tork customers are worried about availability of service and spare parts in the future. As the dealerships may be shut down, users may not be able to get their warranty claims processed.
Tork Motors is not the only EV company facing such issues. Earlier this month, dealers of Hero Electric had protested at the company’s headquarters. Such developments indicate that the electric two-wheeler industry may be heading towards the consolidation stage.
Source: Bike - rushlane.com
