Ola Electric Faces Customer Service Crisis: Stock Plummets 9.1% as Complaints Soar
Indian electric vehicle manufacturer Ola Electric is in hot water as customer complaints about its service and scooters continue to rise. This has led to a significant drop in the company's stock price, falling by as much as 9.1% on Monday to ₹89.14. Ola Electric's market cap has also dipped below $4.75 billion for the first time since its IPO in August.
Despite trading above their IPO price, Ola Electric's shares have plummeted by over 40% to a low of ₹89 from a peak of ₹157. The recent sell-off comes amidst a surge in complaints about the reliability and performance of its scooters, with the company reportedly receiving over 80,000 customer complaints monthly.
Analysts from HSBC noted that Ola Electric's service centers were overwhelmed and struggling to meet service quality expectations. They pointed out a lack of investment in servicing capacity, leading to product issues and a shortage of skilled manpower and testing equipment.
As a result of these challenges, Ola Electric's market share has taken a hit, dropping from 49% in June to 27% by September. In contrast, competitors like Bajaj and TVS are gaining ground in the electric vehicle market, each controlling over 20% of the market.
Ola Electric founder and CEO Bhavish Aggarwal faced backlash after mocking a comedian who raised concerns about customer problems, further adding to the company's woes.
In conclusion, Ola Electric's struggles with customer service have had a significant impact on its stock price and market share. Investors should closely monitor the company's efforts to address these issues and regain customer trust. Consumers considering purchasing Ola Electric scooters should be aware of these challenges and weigh them against the company's offerings before making a decision.