Tork Motors in trouble

The cancellation of subsidies and the inability to obtain new funding have posed significant challenges to Tork Motors

While the electric two-wheeler market continues to see strong growth, some startups are facing an uncertain future. A case in point is Pune-based electric vehicle startup Tork Motors, which currently offers only one product – the Kratos R electric motorcycle.

The dealer complained to the police

According to dealers, Tork Motors stopped deliveries since December 2023. Now, more than seven months have passed and the dealers have collectively filed a police complaint. They were promised to resume deliveries by the end of June, but there has been no further news. Dealers report that the company has not been responsive and most customers have cancelled their bookings. The manufacturing unit in Chakan has reportedly been shut down since last year.

Kiran Pathare, assistant police officer of Pimpuri Chinchwad, said an investigation was underway based on a complaint from a drug dealer. He did not provide further details as the matter was confidential. Pathare said action would be taken next week.

No salary for 7 months

According to reports, Tork Motors employees have not received their salaries for seven months. Tork Motors recently sent an email to employees with the content of “Position Dissolution and Termination of Employment”. The email mentioned that the company conducted an in-depth evaluation of the existing organizational structure and future plans. Based on this, the company believes that it is necessary to dissolve certain positions within the organization.

Tork Motors has officially announced that it will lay off its employees from July 31, 2024. The company said the move will help align the workforce with the strategic goals of the organization. Employees will receive termination letters soon.

Bharat Forge cancels investment

One of the main reasons behind Tork Motors’ troubles is its inability to secure fresh investment. Last month, it was reported that Tork could secure around Rs 50 crore in a new round of funding. However, the deal was reportedly scrapped at the last minute.

In the latest development, Bharat Forge has written off its investment in Tork Motors. This was revealed by the company in a media interview regarding Q1 earnings. Bharat Forge owns 64.29% equity in Tork Motors through its wholly owned subsidiary Kalyani Forge. Bharat Forge has been investing in Tork Motors for the past 4-5 years. However, with the reduction in FAME subsidy, the profitability of Tork Motors has been adversely affected.

Bharat Forge said it is only an investor in Tork Motors and does not manage the company. If there are doubts about the company’s future, it is best to accept the reality and move on. Bharat Forge said it has no plans to provide new investment to Tork Motors. They are working with Tork to ensure an orderly wind-down.

Customer troubles

Most Tork customers are positive about their electric motorcycles. However, due to the uncertainty, Tork customers are concerned about the availability of future services and spare parts. Users may not be able to process their warranty claims as dealerships may be closed.

Tork Motors is not the only electric vehicle company facing such issues. Earlier this month, Hero Electric dealers staged a protest at the company’s headquarters. Such developments suggest that the electric two-wheeler industry may be heading towards a consolidation phase.