Ola Electric suspends manufacturing

The company cites maintenance as the key reason, not inventory pile up.

By Amit Vijay M calendar 01 Aug 2022 Views icon14712 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

Ola Electric has denied reports doing the rounds that it has temporarily paused its manufacturing at its sprawling 500 acres, 10 million-unit facility Krishnagiri near Bengaluru and plans to rationalise staff due to a pile-up of inventory of about 4,000 scooters.

 An Ola Company spokesperson said the staff trimming is "routine" and that like other automakers, “we have shut down our plant for regular maintenance and new machinery installation".

With EV players launching new products as the festive season approaches, Ola Electric has been facing the heat and recent estimates on Vahan suggest that it has lost market share. According to Vahan, Ola Electric clocked around 5,874 electric vehicles (EV) registrations for June 2022, a 36.5 percent drop from 9,255 registrations in May 2022 and less than half of 12,703 registrations in April 2022, the month it became the top electric vehicle maker in the country.

Several customers of Ola have been venting their frustrations on twitter with one buyer Malay Mohapatra saying: "My Ola's suspension has given way. He says "It's high time Ola recalls its scooters with suspension issues. On behalf of Ola' Odisha family, we are making a request to recall such scooters urgently."

Ola had recalled 1,441 of its electric two-wheelers "as a pre-emptive measure" in April 2022, following a fire incident.

On the product front, Ola is not expected to see any new launches in the festive period and has instead promised its customers a product update "by this Diwali the new MoveOS 3 will come with new features like Hill Hold Assist, Proximity Unlocked, Moods, Rijn V2, Hypercharging, Calling, Key Sharing and many more." This was mentioned on a recent tweet by the company’s founder.

A team of analysts from Kotak that visited its Krishnagiri plant said in their report that the company plans to launch a series of new EV products across scooters, motorcycles, sedans, and SUVs. The first of the lot including a mass scooter will roll out by the end of 2022 and a premium electric motorcycle during 2023.  On the passenger car front, the company plans to launch a premium SUV and premium sedan in the current year 2024 followed by mass market variants for both of them. “The company plans to launch Robotaxi with L3 (level 3) autonomous capabilities to complete its suite of products,” said the Kotak report.

In a recent media report, Sohinder Gill who heads the Society of Manufacturers of EVs suggested that the Rs 60,000 to Rs 90,000 category is the fastest growing market within the EV category, and is clawing its way into the entry-level ICE players. For the sake of comparison, an Ola S1 Pro in Mumbai currently stands at Rs 1.41 lakh. In comparison, market leader Okinawa bike price starts from Rs. 61,998 offering a choice of six new models with the top-end offering, OKHI-90 priced at Rs 1,21,866.

In a recent twitter post, Bhavish Agarwal said: "Signed our PLI agreement with MHI for indigenous cell manufacturing. India will soon be self-reliant on cell technology as we build tech & manufacture locally".

Sales numbers for July will be out shortly and as the Ola spokesperson had earlier said "We calibrated our business priority for the month to focus on bettering our customer service and bought our TAT (turnaround time) within 48 hours. Come July, we are confident that supply chain issues will start fading out and our strong order book will be fulfilled." 

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