ola electric: Ola Electric scooter sales show signs of slowing

Sales of Ola Electric’s electric scooters have moderated to 130-200 units per day over the past two weeks after the company moved from a multiple payment window model to a single full payment for the vehicle, ET told two people familiar with the matter.

The SoftBank Group-backed company, which aims to produce 10 million scooters a year, had switched to the new payment model on May 28. Previously, customers could only make partial payments through four separate windows that opened on specific dates.

Multiple sources told ET that Ola was able to sell around 500 scooters a day for three to four days after moving away from the multiple payment window model, but sales subsequently plummeted.

“The company has also offered employees a discount of around Rs 10,000 if they are interested in purchasing the scooter,” a source said, adding that some customers receive delivery of their scooters within 48 hours, which , according to some people, is a possible sign of shrinkage. order book for Ola.

Ola Electric did not respond to ET’s request for comment.

Experts have said that even if Ola manages to sell 1,000 scooters per day, it will add up to 365,000 per year, which will fall far short of the company’s target.

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The company has so far delivered around 50,000 vehicles.

Before the Ola sales slowdown, India had reported several fires involving electric vehicles, including an Ola scooter catching fire in March this year.

Domestic sales of electric two-wheelers in May fell more than 20% from April, recording the second consecutive monthly decline in sales. Listings on the Vahan portal had shown a slight drop in April, which was the first time India’s electric two-wheeler industry had seen a drop in sales in 10 months, according to data compiled by Elara Capital from the portal. Vahan.

For Ola, the month-over-month drop in sales was 27%, the second-largest drop among the top five sellers. Hero Electric saw its registrations drop by 56%.

Ola Electric in figures_Chart_ETTECHETtech

“Ola was expected to top the charts in May, but Okinawa sold the most vehicles, and Ola sales are expected to fall further,” the source quoted above said.

In the past, Ola has faced criticism for quality and not including the features it promised.

“Certainly with the fires, customers would like to wait and watch as the government asks companies for quality control measures and attempts to formalize a battery safety standard,” said Jay Kale, senior vice president, equity analyst, automotive and automotive accessories at Elara Capitale.

Kale expects electric two-wheeler sales in India to rebound soon, but does not see sales top 70,000 per month for the rest of the year. For Ola, which claims to be at the forefront of electrification, those numbers may mean slow sales growth.

The company’s factory can produce 2 million scooters per year, or about 5,500 units per day.

“After being in business for more than two decades, Bajaj sells nearly 2 million two-wheelers in India despite having a wider distribution network,” Kale said. “It’s good to have those goals, but even reaching 1 million will be a big ask for them.”

The Ola S1 pro is priced at Rs 1,39,999, excluding central government subsidy. The company is working on a cheaper version of S1 Pro, which could bring the price down significantly.

“Price-wise, even with subsidies, the S1 Pro was quite affordable, but product quality will remain critical,” Kale said.

Ola is in the process of rolling out the Move OS 2.0 software update for its customers. The update will give customers access to many of the features promised last year when the company unveiled the scooter. This includes GPS navigation, cruise control, a music system and other features.

The company, meanwhile, is also doubling down on future plans, including manufacturing cars and battery cells. It currently imports battery cells from South Korean company LG Chem. Ola is also looking for land for these two projects.

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