Ola Electric Shock: A Reality Check For The EV Industry

One of the most watched unicorns, Ola’s troubles began with a social media spat between comedian Kunal Kamra and Ola Electric CEO Bhavish Aggarwal, which began on October 6.

With the Central Consumer Protection Authority (CCPA) swinging into action on October 8, tossing a show-cause notice at Ola Electric, a sudden shadow descended on the company’s future. 

The X Factor

The angry war of words on ‘X’ between Aggarwal and Kamra began with the comedian tweeting a picture of an Ola service centre with several Ola EV two-wheelers lying unrepaired, allegedly for months.

The 39-year-old Aggarwal not only dismissed Kamra’s tweet as “paid but even called him a “failed comedian”. The fireworks haven’t stopped since then with other commentators joining in to call out Aggarwal as “arrogant”. The matter escalated to the point where Bhavish's rather nasty tweets have been trending. The angry CEO even offered a job to Kamra at one of the company's service centres.   

The real cost of Aggarwal’s responses was not the public relations disaster, though. By October 7, it led to a sharp fall in Ola Electric's shares, down to its lowest-ever level since it was listed on August 9, 2024.

According to data provided by the National Stock Exchange (NSE), on October 4, before the spat, the company's share traded at a little over Rs 99. However, just after the spat -- on October 7 it drastically plummeted to touch Rs 90.82. A month ago, Ola Electric shares traded at Rs 114.10.

With the CCPA also getting into action, things have now gone from bad to worse for Ola, after the apex authority, in its show-cause notice, reportedly cited potential violations of consumer rights, unfair trade practices and misleading advertisements.

Ola Electric was a refreshing, homegrown unicorn that led India’s EV growth with its two-wheeler offerings. It had even recently launched two new EV bikes, trying to break into the petrol-powered market of Yamaha, Royal Enfield and other giants.

A report by a news portal suggests that Ola’s monthly complaints had stacked up to a staggering 80,000 nationwide. These numbers had even prompted the company to form a team to alleviate the burden and streamline the redressal process. 

Nevertheless, this may have contributed to the recent dip in sales of Ola EVs. Data provided by the Federation of Automobile Dealers Associations of India (FADA) highlighted a slip in sales for Ola in the last couple of months. 

Even though Ola Electric started the year on a high with sales clocking 32,252 units in January — a nearly 75 per cent year-on-year increase — in the last couple of months, particularly in August and September, the sales numbers have come down to 27,517 and 24,679 units, respectively. 

What Experts Feel 

Some experts believe that despite the ongoing trouble, Ola has done a great job for the EV market, claiming that the setback is a part of the normal business cycle.

In a conversation with The Secretariat, Mayank Deo, an EV expert with over a decade’s experience in the EV sector, said, “It is part of the transition, given that EV is a sunrise industry. Ola has become a household name and has reached out to the people on the ground. What is happening right now should be a learning curve, not just for Ola, but for other Original Equipment Manufacturers in the space.”

He further noted that given Ola’s high sales volumes, the chance of similar issues arising in the future remains, and that all OEMs will have to treat these as lessons and move ahead.

Experts are still bullish about Ola Electric, highlighting its pioneering efforts at creating and expanding the EV market, saying it has been a leader in penetrating the untapped rural market. “Ola has done pretty well by increasing its number of showrooms in rural areas,” Deo added.

They also note that Ola has set an example by committing to manufacturing EVs in high volumes, which has led to increased adoption rates by customers. 

“Overall, whatever is happening with Ola is part of a business cycle. We should all look at the positive side and take the learning forward,” Deo added. 

“We need to encourage companies like Ola. Given that EV is still a nascent market, there is going to be a learning curve. Over time, it will all be sorted,” he further said.

Other experts note that Ola should be held accountable and take measures to streamline the rising servicing problems. Syed Shiraz Shah, veteran auto journalist, told The Secretariat that he had tested the Ola S1 Pro in 2022 quite extensively and "had come away impressed". "There were zero technical issues with the scooter. Nothing broke, it didn't burst into flames. However, if a large number of customers are facing issues, then Ola needs to take measures to sort them,” he said.

He, however, added that the CEO's arrogance on social media will not do any good to the company. “The best thing to do right now would be to halt all sales for a few months and focus completely on service centres to ensure that customer issues are resolved," Shah said.

He noted that what’s happening with Ola won't affect the overall EV industry, as EV scooter buyers will now put their money in Ola’s competitors. “Whatever sales Ola will lose, other manufacturers will gain those numbers, so EV sales won't suffer,” said Shah.

It is undeniable that there are gaping holes in the EV ecosystem. Foremost among these is the dire lack of roadside mechanics trained to repair EVs, which the recent fracas highlighted.

Early buyers continue to face the brunt. Ruturaj Jena of Cuttack, Odisha, who owns an Ola S1 Air Gen 2, said within the past year, he had to get his EV two-wheeler towed seven times, while also dealing with delayed redressals. 

“The few service centres are already burdened with huge complaint volumes. Here in Cuttack, one could easily see over 500 units waiting to be serviced. I have also seen people bribing technicians to get their vehicles fixed out of turn,” said Jena.

He added that the company should first focus on existing problems buyers are facing, instead of spending on marketing the product. “Customers should come first,” he added.

Upskilling The Roadside EV Mechanic: What OEMs, Govt Need To Do

According to EV numbers aggregator, Clean Mobility Shift, 2.4 million EVs have been sold in 2024, of which two-wheelers accounted for almost half. With such high volumes of EVs entering Indian roads, the question — who will fix them if something goes wrong — is on everyone’s mind.

Some experts believe OEMs need to consider training roadside mechanics. “There is a need for roadside mechanics to be trained to deal with EVs. The problem is, the existing mechanics are not very receptive, and there is a skill gap,” Deo said.

“Nevertheless, all EV OEMs need to consider skilling roadside mechanics. We also need to work on the after-sales market, to improve parts availability.”

Industry watchers also feel the EV industry needs to look at vehicle warranty to raise customer confidence. 

They said the government needs to consider launching a skilling programme in collaboration with OEMs, they also note underlying impediments.

“However, for this to happen, availability of spare parts in the after-sales market is crucial. It will take time, but we need to start somewhere,” Deo said.

Skill development programmes to train mechanics can go a long way for the EV industry. A somewhat similar initiative towards a solar energy transition was started under the PM Surya Ghar scheme. 

“The biggest roadblock is the lack of receptiveness among mechanics, who falsely believe that the advent of EVs will lead to a loss in their businesses. We need to make them understand that upskilling them to repair EVs will only help them expand their customer base,” said Deo.

However, not all experts are convinced that there is a need for government intervention. 

"Ola isn't a government-funded NGO. It's a cash-rich private company and it has to account for its slip-ups. The government has already done more than it should have for EVs and their OEMs," noted Shah.

In all, as the government aims for an ambitious 30 per cent target for EVs among new vehicle sales by 2030, the headache — who will fix the EVs — will continue to dog the industry.

It is not just the lack of charging infrastructure that’s keeping buyers from adopting EVs. The struggle of owners with non-existent after-sales support is real. While Ola and other EV OEMs continue to face such issues, Aggarwal needs to focus on the core of the business dynamics and  ensure that the customers do not suffer.