SoftBank-backed Ola Electric is under scrutiny due to a rise in customer complaints and regulatory scrutiny regarding claims of subpar service.
The leading e-scooter manufacturer in India by market share, Ola Electric, claimed the recent spike in service requests was mostly for “minor issues” and announced a smaller second-quarter loss on Friday, aided by an increase in sales.
The Bengaluru-based business reported that its consolidated loss decreased from 5.24 billion rupees to 4.95 billion rupees ($58.7 million) in the July-September quarter.
With the aid of sales of mainstream models, or those costing under 100,000 rupees (about $1,186), Ola’s quarterly income increased by 39.1% to 12.14 billion rupees. Last year, it hadn’t started shipping these models.
Between July and September, Ola Electric delivered 98,619 two-wheelers, which is 73.6% more than the previous year. 56,545 mass models were sold.
Expenses increased by 21.8%, which was less than the 26.6% increase from the prior quarter. Ola’s largest expense, raw material expenses, increased 46.7% but decreased 18.2% in a consecutive manner.
After an impressive August market debut, the SoftBank-backed e-scooter manufacturer is facing increased consumer complaints and regulatory scrutiny due to claims of subpar service.
During a Friday analyst call, founder and chairwoman Bhavish Aggarwal stated that not all service calls are complaints or product problems, but rather are routine check-ins or planned maintenance.
According to Aggarwal, “two-thirds of it are actually just minor issues like loose parts or customers unfamiliar with the software used.”
Since going public on August 9, Ola Electric’s stock has dropped 5.5%, and in recent months, its market dominance in the electric two-wheeler sector has waned.
We experienced some service capacity issues during the second quarter, as our sales growth outpaced the expansion of our service network, according to Aggarwal.
During its tour to 35 Ola facilities across ten Indian states last year, Reuters discovered that several of them were experiencing severe backlogs as a result of demand exceeding their manpower or spare component availability.
