Ola Electric In 2024: Between Bhavish Aggarwal’s Dreams And The Ground Reality

“Tesla is for the West; Ola is for the rest,” declared India’s much-celebrated (often controversial) entrepreneur and the founder and CEO of Ola Electric, Bhavish Aggarwal, this year.

Aggarwal, who is also now dubbed as India’s own Elon Musk, took such jabs at Tesla and Musk earlier as well, but this time, the statement encapsulated the audacious vision of Ola Electric and its aggressive competitiveness against the domestic rivals after it became a public company.

Starting mid last year, Ola Electric’s listing was one of the most-awaited events of 2024. Given it became the first Indian new-age EV startup to go public, it was hailed as a landmark moment signalling India’s readiness to embrace the rapid shift to electric mobility. 

While Ola’s meteoric rise captured the attention of stock market investors and analysts alike, its journey this year has also been riddled with missteps – customer complaints, fire incidents, and how Aggarwal handled these negative incidents.

It is true that Ola Electric maintained its leading position in the market in terms of sales and ascertained its ability to beat its competitors. However, the electric vehicle maker ended up losing some market share during the year amid a deteriorating public image and the growing strength of players like TVS Motor and Bajaj Auto.

But none of these negative incidents stopped Ola Electric from making further announcements and product forays throughout 2024, including electric motorcycles, electric three-wheelers, and low-speed electric scooters. 

Meanwhile, not all of the startup’s previous announcements were fructified during the year. Despite major promotions of its electric car launch, which was expected in 2024, the plan has now been kept on hold.

This is the story of a startup balancing the promise of pioneering disruption and the reality of falling short—a year that has left the country’s burgeoning EV ecosystem watching whether Ola can truly deliver on its founder’s bold proclamation.

Ola Electric’s 2024: Did Too Many Moves Spoil The Broth? 

The verdict of the automotive veterans and many analysts has been the same in recent days – Ola Electric should focus on one product, its scooters, and address its existing problems, rather than trying its hands on multiple other product categories.

However, that’s not what Aggarwal does anyway. Even in the case of Ola Cabs, the ambitious young entrepreneur has tried out multiple verticals even if it led to significant cash burn and gradual shutdown of the verticals. Today, Ola Cabs is Ola Consumer and Aggarwal is trying anew to make a business out of it on the back of food delivery and potentially quick commerce.

He followed the same strategy for Ola Electric as well on the back of the EV industry boom, a deep pool of capital, and strong branding. 

We can categorise Ola Electric’s 2024 major events into broader buckets – the public market debut, electric motorcycle launch, product portfolio expansion, and escalated customer concerns. Before delving into the missteps, let us first do a quick recap of several other developments in the company that shaped Ola Electric’s story this year and would play a major role in the coming months.

• The EV startup expanded its electric scooter portfolio with the launch of S1X 4kWh in January this year. By December, it expanded it further introducing Ola Gig and S1 Z range of scooters. With that, the startup would soon start locking horns with companies like Yulu and Baaz.
• The company forayed into the electric motorcycle market with the launch of three motorcycles – Roadster X, Roadster, and Roadster Pro. The deliveries are expected to begin in 2025.
• Ola Electric mass rolled out its upgraded Move OS 4 software platform for its two-wheelers earlier this year and also introduced its in-house navigation system, Ola Maps.
• It doubled down on its battery technology – unveiled in-house, indigenous 4680 cells and announced developing solid-state batteries.
• Going beyond battery production for its scooters, the company launched a storage system, Ola PowerPod, which would work like an inverter to power small household appliances such as lights, fans, WiFi routers.
• Two of its scooter models received domestic value addition (DVA) certification under the production-linked incentive (PLI) scheme.
• After two-wheelers, Ola Electric announced its decision to venture into the electric three-wheeler market.
• Despite being a high-valuation IPO, Ola Electric received decent traction from public market investors.

However, none of these important milestones could stop the company from ending the year in a lacklustre manner. From over a 30% market share at the beginning of the year, the startup’s market share in the electric two-wheeler market fell in the 20-25% range by November.

A social media spat between Aggarwal and standup comedian Kunal Kamra brought fresh light to Ola Electric’s poor after-sales service leading to a probe launched by CCPA against the company. The startup made multiple claims and announcements after that as a damage control mechanism but their real impact isn’t yet clear.

In fact, requesting anonymity, an industry veteran told Inc42 that it is now time for Aggarwal to go back to its drawing board and re-evaluate the R&D that went into building its base product rather than venturing into multiple other categories and trying to become India’s Musk. 

Even though Aggarwal has been swift in defending the shortcomings in Ola’s products and servicing, he should have realised that at the end of the day, it is only the customers that make you and break you, said the industry leader.

What Went Wrong For Ola Electric?

It’s important to remember that the recent incidents of fire and stories of disgruntled customers are not the first such cases. While a few safety incidents took place in 2022 and 2023 as well, and social media was always a testament to customer frustrations over its EVs, the matter was buried under the glamorous sales figures and product forays.

In January 2023, Ola Electric launched ‘Ola Care Subscription’ to improve its after-sales service. However, almost two years later, the true impact of the subscription plan remains unclear today. 

Meanwhile, as the issues escalated around August this year, Ola Electric announced the launch of a new offering called “HyperService” to offer “one-day resolution” of service-related issues. 

It is now a common buzz in the automotive industry that Ola Electric should only let its actions speak if it has to sustain itself in the market in the coming decades.

Speaking to Inc42, Dr Allabaksh Naikodi, an industry veteran who led EV verticals in companies like Royal Enfield and Mahindra, said that Ola Electric missed a golden opportunity to establish itself as a credible EV brand in the market even though it had every resource – funds, valuation, and branding.

“The problem with Ola Electric is that the management doesn’t come from the automotive, aerospace or railway backgrounds – the industries that highly prioritise fail safety. These industries carry out extensive testing, validation, and analysis of vehicles at various kinds of failure modes to ensure the highest amount of safety for humans. Ola Electric might have bypassed such processes to a certain extent in a hurry to come to the market,” said Naikodi.

According to the industry leader, the new product development cycle at most of the top automotive companies is at least 36 months, which might go up to 46 months. However, that never seemed to be the case for Ola Electric. 

Despite such underlying issues, the startup became public this year with huge losses in its books. In fact, in a recent analysis of Ola Electric’s future, we found out that the company’s future hinges on two crucial factors — its ability to turn the narrative when it comes to poor servicing and to turn profitable, which is linked to its EV sales volume.

While some brokerages see the startup turning profitable by FY27, it now remains to be seen what aggressive measures Ola Electric’s management team takes to attain profitability. As 2024 ends with a layoff of at least 500 employees in the company and lowered vehicle prices to keep up with the competition, it is unlikely that 2025 is going to be any less eventful for Ola Electric and its stakeholders.

What Lies Ahead?

It goes without saying that Aggarwal is not going to step back from his aggressive goals of product and market expansion. However, like in earlier instances, there could be possible delays in new product deliveries. 

Besides, if the current slowdown in demand for its vehicles persists, the sales are going to dwindle further. On the other hand, after TVS and Bajaj, Ola Electric is set to face another major competition with the entry of Honda in the electric scooter market.

Following the crisis that Ola Electric saw in 2024, an industry leader said that it is highly likely that the company’s market share will dwindle further to 10% in the next five years.

Meanwhile, its capex is large as the expansion of its “state-of-the-art” gigafactory is in the process. Recently, Aggarwal once again made a bold claim of expanding its distribution network to 4,000 stores from existing 800 outlets in less than 20 days.

While it remains to be seen whether Aggarwal’s company would truly face the crisis many industry veterans are predicting, which could also reverse if the founder decides to stitch in time, many international brokerages are highly bullish on the company’s potential in the long term.

Though Aggarwal and Ola Electric have faced much criticism in recent days, Uday Narang, chairman and founder of Omega Seiki Mobility said that the entire EV industry needs to play a role where safety, quality, and service and cost given to customers are given utmost importance in this shift to sustainable mobility.

“Failures happen but we have to be able to build better products and solutions from those experiences,” said Narang.

Will Aggarwal be able to learn from the failures in 2024 and make Ola Electric a truly valuable company for decades to come for its investors and customers alike?

[Edited By Nikhil Subramaniam]

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