Market share for Ola Electric, however, has declined sharply; it stands at 27% during September 2024. This is down 8% from 32% in August and 12% from 39% recorded in July, which is a worrying trend for the Bengaluru-based electric two-wheeler manufacturer. During September, it sold around 23,965 units compared to 26,928 units sold in August and 40,814 units sold in July; sales have declined sharply over the last three months.
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Factors Contributing to the Decline of Ola Electrics
Some of the reasons most critical to bringing down Ola Electric’s market share are:
Customer Complaints
The organization receives thousands of customer complaints in a month, approximately 80,000. Common complaints relate to hardware malfunctions and software failures that have crippled both customer satisfaction as well as the image of the brand.
Service Quality
According to media reports, Ola Electric’s service centers are overcrowded with bookings, and it makes the customers wait for a long time in the queues and experience relatively poorer service levels. In response to this, the company announced that it will scale up its service center from 600 to 1,000 locations by December 24, 2024.
Increased Competition:
Bajaj Auto and TVS Motors have caught up with a widening range of relatively cheaper electric scooter models. Bajaj Auto’s electric scooter, Chetak, and TVS have increased market sales – Bajaj has out-surpassed TVS to become the second major player in the market after Hero Electric for the fiscal year 2020-21. Market share in September: Bajaj stood at about 21.3% approx., TVS was at 20.1%, while Ather Energy took approximately 14% of the market share.
Financial Cost of Ola Electric
Ola Electric’s revenue performance has not been left untouched by the slow decline as well. The company witnessed very minimal revenue growth of 2.8% to ₹1,644 crore in Q1 FY25, while in Q4 FY24, its revenue stood at ₹1,598 crore. During the same time frame, the company could reduce its losses to 16.6% of ₹347 crore. Thus, on the whole, it is a disturbing picture as the company fights operational issues.
More importantly, after the much-awaited listing on the stock market in August 2024, Ola Electric saw the share decline below ₹100 first since its listing and closed at approximately ₹102 on October 1st. This indicates that investors are increasingly becoming worried about the poor performance of the company and the rising challenge of emerging electric vehicle players.
Strategic Initiatives of Ola Electrics
The following strategic initiatives have been undertaken by Ola Electric:
Service Network
Ola Electric is launching Hyper service, which looks to increase the service network capacity and service response time for the customer. Under Hyper service, Ola Electric will be establishing more service centers across India and a one-day resolution guarantee for service complaints will be enforced.
Direct-to-Consumer Model Changes
The direct-to-consumer sales model it had adopted at the launch proved to be inconvenient without any service center. This time the firm is concentrating on opening the service center to meet customers’ requirements and to deliver quality services.
Product Line Extension
Ola Electric is going to extend its line of motorcycles by launching new models that have recently been announced. The company aims to widen its product offerings and expand its customer base.
Concluding Remarks on Ola Electric
The 27% market share that Ola Electric enjoys currently is high and still at the top but, in reality, sharply declined from its earlier peak; hence, the major issues arising from such a fall are related to the operational concerns that need to be addressed.
The company will require flexibility in its strategy while competing with others and trying to improve and seek a rebirth amidst rising competition and disgruntlement among its clients in the increasingly dynamic electric two-wheeler market.
The next couple of months will be crucial for Ola Electric in stabilizing its market share by offering better services and innovative products to win over customer trust.
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This text is written by KASHAF MUHAMMAD