Ola Electric Faces Slump in Sales as Rivals Gain Ground in India's EV Market

Ola Electric, India's largest electric two-wheeler manufacturer, has experienced a significant slump in sales for the month of September 2024. The company sold 23,965 units in September, marking an 11% decline from the 26,928 units sold in August. This drop is part of a larger trend, with Ola Electric's market share falling to 27% in September, down from 31% in August and 47% in September 2023.

Rivals Outperform Ola Electric

In contrast, Ola Electric's rivals have seen substantial growth. Bajaj Auto, for instance, sold 18,933 electric scooters in September, a 13.71% increase from the previous month, and surpassed TVS Motor to become the second-largest electric two-wheeler player. TVS Motor sold 17,865 units, up 2.43% from August. Ather Energy also saw a significant increase, with sales rising by 15.20% to 12,579 units.

The overall electric two-wheeler market in India saw a 1.03% sequential increase to 88,156 units in September, with a robust annual growth of 40% from 63,184 units in September 2023. Bajaj Auto's sales were up 166% year-over-year, TVS Motor's sales increased by 15%, and Ather Energy's sales rose by 75%.

Service Issues and Market Dynamics

The decline in Ola Electric's sales is attributed to several factors, including service issues and customer complaints about after-sales services, software glitches, and hardware malfunctions. To address these concerns, Ola Electric has announced plans to double its service centre network to 1,000 by December and launched a 'HyperService' campaign, which includes a quick-service guarantee and backup scooters for delayed service requests.

Competitors like Bajaj Auto and TVS Motor have also launched lower-priced electric scooter models, such as Bajajs Chetak 2901 and TVSs iQube ST, which have contributed to their market share gains. Bajaj Auto's CEO has announced plans to launch more affordable and premium electric scooters in the upcoming fiscal year.

Market Share and Financial Implications

Ola Electric's market share has dropped significantly, from 38% in March and July 2024 to 27% in September. This decline has also impacted the company's stock performance, with shares falling below Rs 100 for the first time since its public listing in August. Despite this, brokerage firms like Goldman Sachs expect Ola Electric's revenue to grow significantly over the next three years.

The electric vehicle market in India continues to grow, with electric scooters now comprising 20% of scooter sales, although they still account for only 5% of all two-wheeler sales. The industry is poised to hit the million sales mark for the first time in a calendar year, with 9-month sales already crossing 799,000 units.