Ola  eyes mass market scooter

by Amit Vijay M 11 Aug 2022


A three-month dip in monthly numbers on the trot has pushed Ola to rejig its strategy and eye the mass market with its second offering. It  plans to introduce this product on Independence day and is targeted "at the fast-growing Rs 80,000 to 95,000 price range", sources in the know told Autocar Professional.

Ola's CEO Bhavish Aggarwal in a tweet also confirmed the introduction of a new variant stating 'On 15 August, we are launching the greenest product we have ever made.'  But the pricing has not yet been indicated.

There have also been reports that the electric car being showcased on this 15th which Aggarwal has denied but  the company official said, "We may spring a surprise but the fact that we are in advanced stages of developing India’s first electric sports luxury car"

The Softbank-funded EV maker had managed to rake in a record 1, 50,000 bookings around this same period last year but has seen its market share fall for a variety of factors that include chip shortages, inflationary pressures, and negativity around its service delivery.  As compared to 5,874 two-wheelers in June, Ola's numbers for  July were down to 3859 units., and  9,258 electric scooters that it sold in May 2022  data from FADA ( Federation of Automobile Dealers Association) and the government’s Vahan portal shows. Ola is facing competitive pressure from market leader Hero Electric, Okinawa, and  Greaves lead Ampere Motors

Softbank’s  2.93 trillion Japanese yen ($21.68 billion) loss for the June quarter has sounded alarm bells for a "freezing winter for funds" as unicorns are refusing to reduce their valuations. This also explains the real reason for the recent restructuring, cost-cutting measures including  and employee layoffs at the Bengaluru-headquartered ride-hailing to electrical vehicle manufacturing firm.

Brand Management expert, Harish Bijoor who runs Harish Bijoor Consults Inc says that, in his view, Ola tried to chew more than it can bite much early on. Comparing them to vaccines, he suggests, "Like vaccines need to be tried, tested to have their efficacy proven, so are the electric two-wheelers, Ola tried to speed up the curve and went faster than they should have. While I appreciate the sense of purpose and grabbing the first mover advantage, the discipline and science of the business must get the same importance or the takes brands a hit "

The Ola spokesperson said, “Despite a temporary blip due to the chip shortages we were forced to reduce the supply in the market in the last three months.” 

“We are seeing good demand and aim to enlarge our product portfolio as committed already. Our new product offering will make the brand reach a wider segment, keeping in mind the high-performance features one associate with our product," the spokesperson said. 

The EV maker needs to urgently amp up its service delivery network and urgently add more products at the bottom of the pyramid as the mass market is driving electric two-wheeler electric sales added the CEO of the leading maker of electric two to three-wheelers firm requesting anonymity. 

"Customers need to be reassured that their issues are going to be redressed,” he added.

Sohinder Gill of SMEV (Society for Manufacturing of Electric Vehicle)  had also said the market is seeing a chunk of its volumes coming from the  Rs 65,000-90,000  price range. This is due to the customers switching from ICE two-wheelers to EVs as the latter offer a lower total cost of ownership of  1.5 units for a daily charge of roughly Rs 20 rupees as against Rs 200+ one may have to spend for a daily petrol top up in ICE vehicles;

The shift in EVs is largely happening in tier 2 & tier 3 markets where inflation has hurt the most with vagaries of the monsoon playing also impacting rural and agricultural activities.

Ola which is one of the winners of the Centre’ Production Linked Incentive (PLI) scheme has set up a future factory to manufacture the world’s largest and most advanced cell research and development (R&D) facilities with more than 165 ‘unique and cutting-edge’ laboratory equipment to cover all aspects of cell-related R&D.

Ola's Chief Executive had earlier said that core cell technology and battery innovation of India for the world will remain a core focus of its future business operations as "electric mobility is hugely R&D sensitive".

The Ola Spokesperson refuted rumours of the axing of factory workers due to the reduced demand stated. "Out plant in Krishnagiri Bengaluru is an all-women workforce plant for which we have hugely invested in training women from the local areas. The overall industry is facing a shortage of quality talent and it would be foolish to assume that if sales are down for a particular period, people will be axed. We are aggressively looking to hire more resources as we scale up our battery and cell manufacturing operations.”

" I agree that there some businesses have gone through a restructuring where we had to let go people from Ola Dash and other related businesses as any organisation will review its business processes. We are looking forward to the festive season and soon our numbers with the new product offering will demonstrate our leadership in the electric two-wheeler space," the spokesperson signed off.

 


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