Ola Electric’s stock is falling as complaints mount, and market share erodes

Indian electric car manufacturer Ola Electric customers are unhappy with its service and scooters, and it is affecting the company’s stock and market share. The company’s shares fell as much as 9.1% on Monday to R89.14, sending its market cap below $4.75 billion for the first time since its IPO in August.

The company’s shares are still trading above their August IPO price, but have fallen more than 40% to a low of ₹89 (about $1.06) from a peak of ₹157 (about $1.87).

Monday’s sale coincides with increasing customer complaints about the reliability and performance of its scooters. The startup reportedly receives more than 80,000 customer complaints every month, according to the Indian daily, Mint.

“Many service centers seem overwhelmed by service requests and struggle to provide adequate service quality (as expected of an Auto OEM in India),” HSBC analysts wrote in a note after visiting several Ola Electric service stations.

Analysts wrote that Ola Electric “has not invested enough” in providing capacity to match the volumes sold in the last two years.

“There is a severe shortage of skilled workers and testing equipment in many institutions. In addition, there is a clear lack of experience in the development and maintenance of service centers that can be seen in many places. The product problems were more than the company expected. Problems ranged from sensor and software problems in the hub motor to battery discharge when not in use, while other routine service requirements also piled up due to staff shortages,” the note added.

Ola Electric is also rapidly losing market share. The company controlled about 49% of the market in the quarter that ended in June, but its share fell to 27% at the end of September, according to figures published by the Indian government.

Meanwhile, Indian auto giants Bajaj and TVS are increasing their focus on electric vehicles – each now controls more than 20% of the EV market.

Ola Electric’s founder and CEO, Bhavish Aggarwal (pictured above) last weekend mocked a comedian who expressed concern about Ola Electric’s customer problems, saying that the comedian failed in his job and was bribed to criticize the company.