NEW DELHI: Customers’ grievance is a regular affair outside Ola Electric’s service centre in Delhi’s Moti Nagar. A good number of customers who decided to get their hands on the company’s electric vehicle anticipating that it will bring down running costs are struggling to get their product repaired or serviced.
“I should have bought an Activa,” said Ankit, 30, an angry customer who travelled over 10 km to get his e-scooter fixed.
Another customer who runs a small business said since the time he purchased the Ola’s e-scooter, the machine has had one issue after another. “The company should have addressed all the issues before hitting the market... It is no surprise that some consumers are burning their scooters due to frustration,” he said while showing piles of scooters stacked up for servicing.
Be it Google review or social media platform X, the internet is full of similar consumer experiences. There have been instances when consumers took extreme steps, such as burning down an entire showroom out of sheer anger. The situation has reached such an alarming level that now the government has stepped in to protect consumers’ rights.
Besides customers, investors are facing impact arising from bad press. Ola shares have crashed about 45% from its peak, leaving investors in a tight spot who entered at higher levels.
A brake to a head start
Ola Electric had burst onto the EV world with a bold promise — to offer affordable and efficient e-scooters that could replace the traditional internal combustion engine (ICE) powered vehicles. Ola Electric founder and CEO Bhavish Aggarwal had called it ending the ICE age. In no time, it became popular, with a massive influx of pre-bookings and the market leader in the e-two-wheeler space.
However, as deliveries began and new products were launched, complaints started piling up. While initially consumers loved the design and performance of its scooters, after-sales experience became a sore point. It brought attention to its lack of preparedness to compete with legacy players in managing post-purchase customer support.
As per reports, it started receiving about 80,000 complaints a month.
Taking note, the Central Consumer Protection Authority (CCPA) on October 7 issued a show cause notice to Ola for alleged violations of consumer rights, misleading advertisements and unfair trade practices.
Following this, the Ministry of Heavy Industries (MHI) jumped in.
It requested the Automotive Research Association of India (ARAI) to confirm whether Ola Electric was fulfilling warranty obligations and maintaining the required service centres. ARAI asked the automaker to explain why it didn’t inform the authority about a price cut for its S1X 2kWh model before launching the ‘BOSS’ sale.
Experts say if ARAI finds violations of guidelines, Ola could face action, including the risk of losing subsidies under the PM Electric DRIVE Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme. So far, Ola has recognised receiving notice from CCPA and said it will respond in the given 15-day timeframe.
The company explained that a limited festive promotional campaign had offered customers a discount of Rs 5,000 on scooter and only a select group of buyers could avail a larger discount of Rs 25,000. It said the official price of Ola S1 X 2KWh scooters remains unchanged.
Slipping market share
Amid rising number of complaints, it is now facing stiff competition from legacy players. The Bengaluru-based company clocked its lowest monthly sales in September and its market share fell to 27% from 47% in September 2023. It sold 23,965 vehicles in September 2024.
Rival firms are seeing a big rise in market share. Bajaj Auto sold 18,933 EVs last month as against 16,650 units in August. Bajaj’s EV sales grew 166% YoY and it for the first time overtook TVS Motor in monthly EV sales. TVS Motor’s e-scooter registrations came to 17,865 units in September. Ather Energy saw a rise of 15% month-on-month in its EV sales to 12,579 units in September from 10,919 units in August.
A declining market share and rising government scrutiny have started to weigh in on the company’s share prices. The stock fell marginally to settle at Rs 87.30 on Friday. It has slumped 45% from its record high value of Rs 157.53, a level seen on August 20, 2024. The stock is now crawling back to its listing price of Rs 76.
“Currently, Ola Electric is coming to its listing price after touching a high of Rs 157. There has been outrage in social media for the last few weeks and the stock saw profit booking. Investors with a high-risk appetite and long-term view can buy this stock at current price range,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.
While Ola Electric could not reply to queries sent by TNIE by the time the story was published, it reportedly acknowledged the issues and promised to improve its after-sales service. It has announced plans to expand its service network from 400 centres to 1,000 by the end of the year. Ola Electric has reportedly brought in consultancy firm EY India to help tackle rising after-sales issues.