Ola Electric faces stock plunge amid customer complaints

Stock Plunge
Stock Plunge

Ola Electric, the Indian electric vehicle maker, is grappling with mounting challenges as customer dissatisfaction with its service and scooters takes a toll on the company’s stock and market share. The company’s shares plummeted by as much as 9.1% on Monday to ₹89.14, pushing its market cap below $4.75 billion for the first time since its IPO in August. Despite still trading above their August IPO price, the shares have nosedived more than 40% to a low of ₹89 (about $1.06) from a peak of ₹157 (about $1.87).

The sell-off on Monday coincides with a surge in customer complaints about the reliability and performance of Ola Electric’s scooters. According to Indian daily newspaper Mint, the startup reportedly receives numerous complaints. HSBC analysts, after visiting several Ola Electric service stations, noted that the service centers appeared overwhelmed and were struggling to provide adequate service.

The analysts highlighted that Ola Electric had not invested sufficiently in its servicing capacity to match the volumes sold over the past two years.

Stock decline amid customer dissatisfaction

“There is an acute shortage of skilled manpower and testing equipment in most centers.

Plus, there is a clear lack of experience in the development and maintenance of service centers visible in many locations. Product issues were more than the company expected. Issues ranged from sensor and software problems in the hub motor to battery discharge during non-usage, while other regular service requirements also accumulated due to staff shortages,” the note added.

Ola Electric is also rapidly losing market share. The company commanded about 49% of the market in the quarter ended June, but its share fell to 27% by the end of September, according to figures published by the Indian government. Meanwhile, Indian automotive giants Bajaj and TVS are ramping up their focus on electric vehicles — each now controls over 20% of the EV market.

Ola Electric founder and chief executive Bhavish Aggarwal recently went on the offensive against a comedian who had raised concerns about Ola Electric customers’ problems, alleging the comic had failed in his career and had taken bribes to criticize the company.

Maya Johnson

Maya is the editor-in-chief of KillerStartups.com. She provides value to early-stage entrepreneurs through content and her weekly newsletter. Reach her at maya@killerstartups.com

More Stories