India’s largest electric vehicle company is in trouble.
Shares of OlaiOlaOla is a transportation company, founded in 2010 by Bhavish Agarwal, which offers ride-hailing services and sells electric scooters.READ MORE Electric Mobility hit an all-time low on March 3 — down more than 60% from its peak in August 2024.
Market analysts say the company, which went on an expansion frenzy in 2022, is facing tough competition from legacy two-wheeler giants like Bajaj Auto and TVS Motor, as well as the promising startup Ather. Piling customer complaints against Ola’s scooters are adding to the company’s woes and leading to a rapid fall in sales.
“Ola’s early competitive advantage as a first mover has diminished as established two-wheeler manufacturers have entered the electric vehicle space,” D Dhanuraj, founder-chairman of the Centre for Public Policy Research, told Rest of World. “Brand trustworthiness and loyalty are now challenged by these older, established players.”
Rest of World breaks down Ola’s troubles in five charts.
Ola Electric Mobility received a valuation of $3 billion within the first five years of launch and secured backing from marquee investors like American venture capital firm Tiger Global and Japanese investing giant SoftBank. The company aspired to lead the EV market in India, projected to become a world leader in the sector by 2030.
The Ola Future Factory, its e-scooter manufacturing facility in the southern Indian state of Tamil Nadu, claimed to have an annual capacity of 1 million units as of March 2024.
Out of the 1.14 million electric two-wheelers sold in India in 2024, Ola produced 407,673, capturing a market share of 35%.
The sales slump is now evident — only 8,647 Ola scooters were registered in February this year, down from nearly 34,000 a year ago, according to government data compiled by online vehicle registration system Vahan.
The company’s financials remain in the red, and its margins are shrinking. By the quarter ending December 2024, Ola Electric Mobility posted a net loss of 5.64 billion rupees ($65 million), up from 3.8 billion ($44 million) a year ago.
The quality of Ola’s scooters has come under scrutiny, exacerbating the sales slump. In October 2024, India’s consumer rights enforcement agency sent Ola a warning letter, seeking a legal explanation for the 10,664 consumer complaints it had received about delayed deliveries, unsatisfactory service, false advertising, manufacturing defects, and more.
Ola told the enforcement agency it had resolved 99% of the complaints, but the enforcement agency wasn’t convinced and ordered a probe into the issue.
Ola did not respond to Rest of World’s request for comment by the time of publishing.
To stem its losses, Ola is cutting 1,000 jobs across procurement, fulfillment, customer relations, and charging infrastructure, Bloomberg reported on March 3.
While some churn is likely driven by manufacturing automation, the downsizing “can be seen as both a sign of distress and a part of routine streamlining efforts,” Vivek Kumar, project manager of the automotive division at data analytics and consulting firm GlobalData, told Rest of World.
“Frequent turnover in senior management disrupts strategic planning and creates obstacles in the company’s development,” Kumar said.
In the last quarter of 2024, a slew of executives left the company, including the chief technical officer, chief marketing officer, chief people officer, chief business officer, and head of sales. In April the same year, Ola Electric’s CEO resigned just three months after he took the reins, and its chief financial officer departed the next month.
In a March 5 filing with India’s stock exchange, BSE, Ola Electric Mobility disclosed that it received a government subsidy of $8.5 million under the Production Linked Incentive Scheme for the automobile industry, making it the first two-wheeler EV company to benefit from the incentive designed to boost the country’s EV production.
Kumar foresees the government’s financial aid potentially translating into Ola expanding its battery production — although the company will struggle to invest in new technology, and research and development, in light of low profit margins.
“Continuous financial losses could erode investor confidence, potentially leading to both financial and operational challenges,” Kumar said.