Indian electric vehicle manufacturer Ola Electric’s customers are dissatisfied with its services and scooters, which is affecting the company’s stock and market share. The company’s shares fell as much as 9.1% to ₹89.14 on Monday, taking its market capitalization 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% from a high of ₹157 (about $1.87) to a low of ₹89 (about $1.06).
Monday’s sell-off coincided with a surge in customer complaints about the scooters’ reliability and performance. According to Indian daily Mint, the startup reportedly receives over 80,000 customer complaints every month.
“Most service centers were overwhelmed with service requests and were struggling to provide adequate service quality (as expected from automotive OEMs in India),” HSBC analysts wrote in a note after visiting several Ola Electric service stations.
Analysts wrote that Ola Electric had “not invested” enough in service capacity to match the volumes sold over the past two years.
“Most centers have a severe shortage of skilled personnel and testing equipment. Moreover, there is a clear lack of experience in the development and maintenance of service centers found in many regions. There were more product problems than the company expected. “Problems ranged from sensor and software issues with the hub motors to battery discharges while not in use, while other regular service requirements also piled up due to staff shortages,” he added.
Ola Electric is also losing market share fast. The company had about 49% of the market in the quarter ended June, but its share fell to 27% by the end of September, according to figures released by the Indian government.
Meanwhile, Indian auto giants Bajaj and TVS are focusing more on electric vehicles, and each now holds more than 20% of the EV market.
Ola Electric founder and CEO Bhavish Aggarwal (pictured above) last weekend mocked a comedian for raising concerns about problems with Ola Electric customers, claiming the comic had failed in his career and had been bribed to criticize the company.
