Ola Electric's stock plummets as complaints increase and its market share declines.

Customers are dissatisfied with the service and scooters put together by Indian electric vehicle maker Ola Electric, which hurts the stocks and market share.
Ola Electric's stock plummets as complaints increase and its market share declines.

Customers are dissatisfied with the service and scooters put together by Indian electric vehicle maker Ola Electric, which hurts the stocks and market share. The scrip has already declined to as much as 9.1% to ₹89.14 on Monday that left the market capitalisation under $4.75 billion for the first time since its IPO in August.

The stock still trades above its IPO price in August but is now down by more than 40% to a low of ₹89, or roughly $1.06, from a high of ₹157, or about $1.87.

The sell-off on Monday comes when customer complaints on issues with the reliability and performance of scooters have gone up. According to Indian daily Mint, over 80,000 are reportedly registered every month with the startup.

"Most of the service centers were seen overwhelmed by service requests and struggled to deliver acceptable quality of service (expected from an Auto OEM in India)," HSBC analysts wrote a note after visiting a few Ola Electric service stations.

The analysts said that Ola Electric "did not invest" enough in servicing capacity to match volumes sold over the past two years.

Most centers witnessed an acute shortage of skilled manpower and testing equipment. In addition, the lack of experience in the development and maintenance of service centers was perceptible in many locations. Problems with products were more than the company had anticipated. Some issues ranged from sensor and software problems in the hub motor to battery discharge during non-usage, while other regular service requirements also mounted because of staff shortages," it added in the note.

Ola Electric, too, is losing market share quickly. It had had about 49% of the market in the quarter ended June, but its share was down at 27% as of September end, according to figures the Indian government has released.
Indian auto behemoths Bajaj and TVS are scaling up their efforts in electric vehicles - both now control more than 20% of the EV market.

Founder and chief executive of Ola Electric Bhavish Aggarwal, seen above, last weekend mocked a comedian who had raised concerns about problems with Ola Electric customers, alleging the comic had failed in his career and had taken bribes to criticize the company.

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2024-10-07 18:32:41