Ola Electric, India’s electric scooter manufacturer has recorded its lowest monthly sales for the year in September 2024. The SoftBank-backed firm is now grappling with increased competition from rivals, service network issues, and a shrinking market share.
Ola Electric: Sales decline
Ola Electric sold 23,965 vehicles in September, marking a second consecutive month of declining sales. The company’s market share has steadily dropped from over 50 per cent in April to just 27 per cent in September, according to government data. This decrease reflects a growing challenge from smaller competitors, including TVS Motor and Bajaj Auto, which have made significant market gains in recent months.
Rivals gaining
During the same period, TVS Motor and Bajaj Auto have reported consecutive market share increases, closing the gap with Ola Electric. TVS has now gained market share for five straight months, while Bajaj has seen gains for three consecutive months.
Service network issues and competitor growth
Ola’s shrinking lead can be attributed to its competitors launching new models with prices similar to Ola’s and expanding their service networks. Bajaj, for example, has increased the number of dealerships for its Chetak e-scooters from 100 to over 500 within the last year. Ola, on the other hand, has seen minimal growth in its dealership network, with numbers rising from 750 to just 800.
Service-related issues have also played a significant role. Last month, an incident involving a dissatisfied customer setting fire to an Ola showroom in Karnataka highlighted the company’s ongoing struggles with after-sales service. Analysts, including those from HSBC, have noted that improving its service network will be crucial for Ola to maintain its position in the market.
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Profitability challenges ahead
Despite its aggressive pricing strategy, Ola Electric has yet to turn a profit. With sales slowing and competitors strengthening their positions, the company faces an uphill battle in both the financial and competitive landscapes.
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