Ola Electric’s stock declines as customer complaints increase and market share diminishes, raising concerns about the company’s future performance
The stock and market share of Indian electric vehicle manufacturer Ola Electric are being impacted by dissatisfied consumers who are dissatisfied with the company’s service and scooters.
The company’s market capitalization was below $4.75 billion for the first time since its IPO in August, as its shares declined by as much as 9.1% on Monday to ₹89.14.
The company’s shares are trading at a price higher than their August IPO price. Still, they have declined by over 40% to a minimum of ₹89 (approximately $1.06) from a peak of ₹157 (approximately $1.87).
The sell-off on Monday is occurring in conjunction with increased customer complaints regarding the scooters’ reliability and performance. Mint, an Indian daily publication, reports that the startup receives over 80,000 customer complaints monthly.
After visiting numerous Ola Electric service stations, HSBC analysts noted that “the majority of service centers appeared to be inundated with service requests and were unable to provide the level of service quality that is typically expected from an auto OEM in India.”
The analysts stated that Ola Electric failed to allocate sufficient resources to its servicing capacity to correspond with the volumes sold over the previous two years.
“Most centers are experiencing a severe shortage of testing equipment and skilled labor.”
Additionally, the development and maintenance of service centers are lacking in experience in numerous locations. The company encountered a greater number of product issues than anticipated.
The note, accessed through S&P Market Intelligence, also mentioned that the hub motor experienced sensor and software issues and battery discharge during non-usage.
Additionally, other regular service requirements had accumulated due to staff shortages.
Ola Electric is also experiencing a steep decline in market share.
The Indian government’s figures indicate that the company’s market share had decreased from approximately 49% in the quarter ending in June to 27% by the end of September.
In the interim, Bajaj and TVS, two of the largest automotive companies in India, are intensifying their efforts to develop electric vehicles. Each company currently holds more than 20% of the EV market.
Last weekend, Ola Electric founder and chief executive Bhavish Aggarwal mocked 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.
