Over-Confidence Runs Ola Electric Dreams Down to Gutter, Stock Prices Plummet Further

Ola Electric, once hailed as a trailblazer in India’s electric vehicle (EV) market, is now grappling with a host of challenges that threaten to derail its success. From a show-cause notice issued by the Central Consumer Protection Authority (CCPA) to a flurry of customer complaints and a sharp decline in stock prices, the company is under intense scrutiny.

On Tuesday, the company’s stock hit a record low of Rs 86 per share, a staggering 43% drop from its all-time high of Rs 157.40 just a few days prior. Though it recovered slightly, the decline is a far cry from its debut price of Rs 76, raising concerns about investor confidence in the Bhavish Aggarwal-led firm.

Ola Electric acknowledged receiving the show-cause notice from the CCPA in a stock exchange filing, stating, “The Central Consumer Protection Authority has provided a timeline of 15 days to the company to respond… We will respond within the given timeframe with supporting documents.”

The notice cited several potential violations of the Consumer Protection Act, 2019, and highlighted a litany of complaints from consumers, including manufacturing defects, unresolved issues despite servicing, partial or no refunds on cancellations, and inaccuracies in billing. Most notably, recurring battery problems have plagued Ola’s flagship electric scooters, undermining the brand’s reputation in a market already skeptical of EV reliability.

The National Consumer Helpline, managed by the Department of Consumer Affairs, has reportedly received over 10,000 complaints against Ola Electric since September 2023, signaling widespread dissatisfaction. Nidhi Khare, Secretary of the Department of Consumer Affairs, noted, “The CCPA is looking into a large number of complaints about Ola Electric, mainly related to service inefficiencies. We hope the company addresses these concerns promptly.”

Meanwhile, discontented customers have taken to social media to air their grievances. From faulty hardware to unresolved software issues, complaints about the company’s service centers and the poor quality of its e-scooters are mounting.

One frustrated user shared on X (formerly Twitter), “Even after the big announcement in service expansion, service centers are working the same. I delivered my scooter to Ola 3 weeks ago… Though it’s not properly fixed, OLA asked me to book RSA under my cost. I regret my decision to buy this scooter in 2022.” Another user criticized the design flaws, writing, “Ola scooters… are poorly engineered products. The OLA updated 2.0 platform has taken away any repairability… How is any of this GREEN?”

Ola Electric’s woes come at a critical juncture for India’s EV market. The company initially gained significant traction by positioning itself as a key player in the country’s green mobility push. Its e-scooters, which garnered attention for their sleek design and promise of high performance, were seen as a revolutionary step toward a more sustainable transportation system.

However, this momentum has been marred by quality control issues and complaints of inadequate after-sales service. The ongoing scrutiny from the CCPA and the mounting consumer dissatisfaction now threaten to overshadow the company’s potential.

Historically, rapid growth in the tech or EV space often brings operational challenges, particularly in emerging markets like India. Ola Electric’s struggles echo those of other global EV giants, including Tesla, which faced significant criticism early on for quality issues and delays in servicing. The difference lies in how companies respond to such setbacks. While Tesla was able to eventually overcome these challenges, it remains to be seen if Ola Electric can similarly recalibrate and rebuild consumer trust.

For now, the company is at a crossroads. With the stock price sliding, regulatory pressure mounting, and consumer confidence waning, Ola Electric faces an uphill battle to regain its footing in the competitive EV space. The coming weeks will be crucial in determining whether the company can address these challenges or if it risks skidding further off the road.