Ola Electric has its work cut out now
The company’s direct-to-customer delivery model has created a great deal of scepticism among dealers who are not sure if this will work in a country where physical interactions matter. Not all buyers echo these sentiments even while they have their own share of complaints
For Anant Patil, a Belgavi-based businessman, the experience with Ola Electric has been a mixed bag. As he puts it, while the delivery process was “acceptable”, the wait for his S1 Pro scooter was a never ending ordeal.
After weeks of follow ups and reassurances coming in from the company on the scooter having been despatched from the factory, he finally got it in mid-January but with a temporary registration plate.
“They have outsourced the registration process to a third party and it is taking a lot of time. In my case, there is no registration documentation provided with the scooter either which is worrying,” says Patil.
He is now at its wits end with Ola Electric’s online customer support team. Pleas to get his scooter registered well in time before the temporary registration expires have fallen on deaf ears and he is naturally experiencing a tremendous sense of isolation.
“There is no transparency in their process. I called the customer care department which says it will escalate the issue, but there is no follow up so far. I was told that the scooter will get registered by them but I think I will need to go myself physically to the RTO,” says a visibly exasperated Patil.
According to data issued by the Federation of Automobile Dealers Associations of India (FADA), Ola Electric’s total vehicle registrations as per the Vahan dashboard were a mere 240 units in December 2021 against its claimed 4,000 deliveries and only touched 1,100 units in January 2022.
While many auto dealers squarely place the blame on the direct-to-customer (D2C) retail model — which they believe is a recipe for disaster — the company has put the onus instead on a fully-digital registration process that its CEO Bhavish Aggarwal has tweeted “is new for all and is taking longer than anticipated”.
Customers in various cities, especially in the south, are receiving scooters with temporary registration plates valid for up to 30 days. These are not being reflected in the online Vahan database, which only tabulates the permanent vehicle numbers issued by state RTOs.
A spokesperson for Ola Electric says there have been several learnings about the varying registration process from state to state. “It is doing this seamlessly working along with RTOs even though the process in some cases is taking longer than expected,” she adds.
The entire process of buying an Ola scooter involves online pre-booking and payment on the company’s app. This is followed by physical signatures of the customer on ‘Form 20’ by a visiting Ola representative for completion of the registration process, and then the allotment of a number plate for the vehicle.
While the company is eying a completely digital registration process, many states still lack the required infrastructure. This is becoming a huge operational challenge consequently. With customers being promised a no-hassle digital buying process, many are still being required to physically go to the RTO and get the permanent registration completed for scooters delivered with a temporary number plate.
At its end, Ola Electric has tied up with third-party agencies and their representatives are visiting customers for their physical signatures on registration documents which are then being submitted to the respective RTOs. After registration is complete, the number plates are affixed at an Ola stockyard in the city.
The scooter along with its Registration Certificate (RC) is delivered at the doorstep by a third-party transporter. Sources say Ola Electric has partnered Gurugram-based Rosmerta Technologies for printing these RCs.
Some of these testing problems will continue to linger for a while which also explains why customers like Patil do not subscribe to the ‘doom-and-gloom’ scenario. For a start, he is pleased with the company’s response to resolving a jerky accelerator issue in his brand-new scooter. This was remotely diagnosed and rectified by giving instructions over the phone.
Patil is also hopeful about the fact that since very little can go wrong with an electric two-wheeler, the promised doorstep service experience should be reasonably good. “Home servicing is better but it depends on up to what level Ola can manage it. It is also easy for them to service the scooter as it does not have an engine and, hence, very little work is required,” he adds.
What gives Patil a high is the scooter’s fit-and-finish as well as its ride quality which has in a way made up for the long delivery delay. He reiterates that he will definitely recommend the scooter to others without thinking twice.
“I had bought a motorcycle earlier where I had to wait for a few days and finally go to a different dealership for the colour I wanted. In the case of Ola’s D2C, it is easier to buy directly from the company. To me, it is a novel way of buying a two-wheeler,” says Patil.
Sure, the niggles continue to remain in terms of “very little interaction” within the Ola team coupled with practically no accountability for closing a customer’s complaint. Emails acknowledging the complaint do come in but a ticket number does not get resolved for a long time.
Patil chooses to be optimistic though. “The initial hiccups are definitely there and once they get sorted out by taking customer feedback seriously, it will be a different experience altogether,” he says.
D2C does need an interface
FADA president Vinkesh Gulati insists that the total lack of a physical interface between the customer and Ola Electric is the biggest drawback of the retail model. In his view, D2C does not mean that there should not be an interface.
“You need to have one. It is not as if a customer is buying a TV and will only touch the remote for the next three years. If that was the case, big players in the two-wheeler space would not be setting up dealerships anymore,” he says.
While every OEM is working towards increasing market reach, Ola is looking to launch a product where the customer “does not have anyone to talk to physically”. Gulati’s views represent a genuine problem being faced by Ola’s customers. According to Kochi-based John, who received his scooter on the second day of the new year, the company is “not focusing on customer support” but only trying to push more scooters out of its factory.
The call-centre personnel are also not trained enough to take ownership of a problem. “Since January 16, I have raised four tickets, including two for getting the left brake lever and tail lamp replaced, but there has been little to no response or any follow up from the company,” he adds.
While the roadside assistance functions 24x7, Ola Electric’s customer support cell is only accessible between 8am and 8pm. “They do not have an expert to tell them how things are done. It is a tech-first company and it is quite appalling to see that they are lacking in systems,” says John.
This is in sync with what FADA’s Gulati reiterates is the core of the problem. “While Ola has a very good process of undertaking bookings and completing registrations, there is no system in place when a customer faces problems.”
From the customer’s point of view, there should be “at least one physical infrastructure in every city” for grievance redressal. Even a 1,000-square feet office at all locations with one service, sales and technical support representative is “adequate enough” for the numbers they are doing today, he adds.
John of Kochi will wholeheartedly agree with this observation since he had to literally fight for over three weeks to get his brand-new scooter registered. Like his fellow customer, Patil of Belgavi, he has only been dealing with the company’s elusive customer support representatives over the phone and on social media.
However, he has no cribs about the business model per se and admits that he was drawn to Ola’s D2C model which yanked him away from buying an Ather 450X. “I really liked what Ather is doing in Bengaluru with its company-owned outlet and I wanted to buy a scooter directly from them,” he says.
From his point of view, while a company will not falter with the customer — since it looks at things from the long-term perspective — a dealer is sometimes only around to “reap short-term gains”. Ola Electric, on the contrary, brings scooters for a test ride “at your doorstep”.
As John recalls, “The product was delivered at my home with barely 8 km on the odometer. Even if something was damaged, they would have replaced it. The middlemen sometimes spoil the whole experience with different dealerships doing shady practices.”
The dealer community has another story to tell and are dismissive about the company’s retail strategy while sounding out a note of caution that it will face more serious challenges in the future. “Ola Electric is trying to ape Tesla which is in a different genre. All the flak being received is related to the delivery process of its scooters,” says Nikunj Sanghi, an Alwar-based dealer for Hero MotoCorp.
There are no two ways about the fact that many Ola customers have complained about their experiences on social media which vary from receiving scooters with misaligned panels to scratches on the body and some high-tech features being dysfunctional.
According to Sanghi, if there was any minor glitch in the product, the dealers would have taken care of it. “Catering to a large market like India is a different ballgame. It is a gross miscalculation on the part of Ola Electric to not have a dealer network in India,” he adds.
The D2C model perhaps makes business sense for the company since it has tried to bypass dealer margins and offer a more attractive price tag for its S1 and S1 Pro electric scooters. The duo is priced at Rs 99,999 and Rs 129,999 (ex-showroom, Bengaluru) each compared to the Ather 450 Plus at Rs 131,647 and Rs 150,657 for the Ather 450X.
“I think Ola’s business reasoning is that the cost of direct retail would be much lower than dealer margins. However, the company probably did not realise the kind of services dealers provide and why they are necessary,” says Sanghi.
According to him, a vehicle is a moving asset which always requires service even if it is an electric option with only 10 percent moving parts compared to an IC-engine vehicle. There will be accidents, tyre replacements, suspension overhauls etc and dealers always end up being a less expensive option than the company having its own service outlets.
The dealer fraternity is firmly of the belief that Ola Electric is managing retail through its D2C model simply because it has a high number of pre-bookings that do not warrant a sitting inventory. “If the ‘pull’ model continues in the market, they will succeed but when the market gets flooded with electric vehicles, they will struggle,” says FADA’s Gulati.
He believes a time will come when the current pull market switches to a push (market) perhaps two years down the line. EV buyers are still a niche segment and some “major influencing parameters” in the decision-making process include the image associated with a green number plate and the price-no-bar factor.
In Gulati’s view, the company will gradually streamline and consolidate its systems over the next few months. “They have already announced that production of the base S1 scooter will not happen before late-2022,” he says.
Ola Electric had conveyed to its S1 customers on the last day of 2021 that they would be upgraded to the S1 Pro’s hardware at no cost. However, they would need to pay to unlock the complete feature set of the more technologically-advanced scooter.
Buyers later received emails from the company stating that the S1 would only be produced by the end of 2022, citing that the chunk of the pre-bookings were for the higher S1 Pro trim. Deliveries have also been delayed significantly from the company’s initial commitment of October-November 2021 and eventually started only from December 15 last year.
Moreover, even the timeline when its ten-million-unit annual capacity future factory in Tamil Nadu comes on-stream and the production targets have not been met. According to an online post by Bhavish Aggarwal, Ola Electric managed to reach a daily production output of only 1,000 electric scooters on January 6 this year.
“If they intend to build 100,000 scooters every month, they will struggle with the customer experience. They do not know that India doesn't buy vehicles…India buys an experience,” says Gulati. He does not think Ola will switch to a dealer/franchise model in the future but will limit itself to certain cities and states, build an infrastructure and then expand.
“I will be extremely happy to see them succeed; D2C is a beautiful concept for the future, considering the vastness of our country. But their processes should be robust,” says Gulati. John, the customer in Kochi, agrees with this reasoning. “With more scooters getting on the roads, they will get a lot more complaints in the coming months. They need to set their priorities right and quickly direct focus on customer service.”
Clearly, Ola Electric has not the easiest of rides so far especially in the context of the huge levels of optimism after the Independence Day launch of its e-scooters last year. From production delays to irate customers receiving brand new bikes with scratches, the last six months have been tough for the company.
Yet, it would be unfair to assume that things will not look up eventually. As a rival CEO puts it, “There is no point gloating over the fact that Ola is getting it all wrong. Once it figures out which are the areas that need to be fixed, some of us had better be more watchful.”
While FAME subsidies and fiscal sops offered by States have contributed to the sales momentum in electric two-wheelers, Ola Electric has been a huge disruptor without a doubt. The challenge for the company is to walk the talk.
There is nothing sweeter than success but equally there is nothing as devastating as failure especially when someone has promised customers the moon. Ola Electric has its work cut out in the coming months as it strives to build better customer confidence in the market.
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