Ola Electric Mobility Ltd’s stock has fallen by nearly 10% after it said on 25 December that it would expand its network to 4,000 outlets from 800 to improve customer service. While this should have been perceived as a positive, within 48 hours of the announcement, a fresh problem cropped up.
The fall in stock price may be attributed to old unconfirmed reports of key managerial personnel quitting the company. Ola confirmed this on Friday after market hours. Suvonil Chatterjee, the company’s chief technology and product officer and Anshul Khandelwal, chief marketing officer, have quit the company.
Even though the current penetration of electric scooters is just about 21.4% in total scooter sales as of September, the fact remains that Ola allowed incumbent internal combustion engine (ICE) rivals such as Bajaj Auto Ltd and TVS Motor Co. Ltd to catch up in electric scooter space owing to product and service issues. The Q3FY25 data from Vaahan website shows that Ola scooter sales barely grew by 0.3% year-on-year to 84,147 units.
Opportunity vs customer interest
The company will have a chance to correct the shortcomings of its scooter segment as the network expansion could help grab a bigger opportunity in motorcycles. Motorcycles account for two-thirds of the total two-wheeler sales in India. Whether one looks at the premium end of motorcycles, where Royal Enfield is the leader, or companies like Bajaj Auto that are doing well in the lower end, they have not launched any electric motorcycles so far. Ola has already started taking bookings for the Roadster series of motorcycles.
Ola’s Roadster is priced competitively versus the traditional motorbikes, and the announced range for a single charge is also good. The lowest-priced model costs ₹75,000 and the highest-priced ₹2,50,000. The minimum range is 117 kilometres for the entry-level model, and the highest range is a staggering 579km for the top model. So, if Ola gets it right this time and the trend of electric motocycles picks up, the total addressable market in India alone will be huge.
Though the motorcycle market is bigger than the scooter market, and Ola has the lead in terms of product launch, the caveat is that the electric motorcycles have failed to impress. For some riders, the silent running of the vehicle can be a turn-off. Riders normally like a motorcycle that is all about the sense of power and control, which comes with the sound of the engine.
