Ola Electric, India’s largest electric scooter maker, saw its lowest monthly sales this year in September, highlighting the growing competition in the e-scooter market. According to government data, Ola sold 23,965 vehicles in September, marking the second consecutive month of declining sales.
The company’s once-dominant market share has dropped for five months straight, declining from over 50% in April to just 27% in September. During this period, Ola’s rivals, TVS Motor and Bajaj Auto, have steadily gained ground. TVS and Bajaj have been improving their market share for five and three months, respectively, closing the gap with Ola.
Ola Electric, backed by SoftBank, did not respond to inquiries from Reuters about its falling market share and the challenges in its servicing network. Analysts attribute the company’s struggles to increased competition and issues within its service network, where scooters have been piling up due to servicing delays.
Ola has also faced challenges with its dealership expansion. While its network of dealers has grown only slightly, from 750 to 800 over the past year, competitors like Bajaj have significantly ramped up their dealership networks. Bajaj, which sells Chetak e-scooters, has increased its dealership count from 100 to over 500 as of June. This expansion has played a key role in helping competitors like Bajaj and TVS catch up with Ola.
Ola’s challenges have extended beyond sales and market share. Last month, a 26-year-old man was arrested for allegedly setting fire to an Ola showroom in Karnataka after being dissatisfied with the service for his newly purchased e-scooter. This incident highlights the growing concerns about Ola’s after-sales service, which analysts believe is a critical factor in maintaining its position in the market.
HSBC analysts have pointed out that improving service quality will be one of the “key drivers” for Ola to hold onto its market share, as competition from rivals intensifies. With Ola yet to turn a profit, its slowing sales and narrowing lead over competitors present significant hurdles for the company’s financial performance.
In recent months, rivals have launched newer models that are priced similarly to Ola’s scooters, reducing Ola’s price advantage. With competitors like TVS and Bajaj expanding their presence in the e-scooter market, the competition for dominance in India’s rapidly growing electric vehicle market is heating up.
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