Indian electric vehicle maker Ola Electric’s customers aren’t happy with its service and scooters, and it’s affecting the company’s stock and market share. The company’s shares fell by as much as 9.1% on Monday to ₹89.14, sending its market cap below $4.75 billion for the first time since its IPO in August.
The company’s shares are still trading above their August IPO price, but have fallen more than 40% to a low of ₹89 (about $1.06) from a peak of ₹157 (about $1.87).
Monday’s sell-off coincides with a surge in customer complaints about the reliability and performance of its scooters. The startup reportedly receives over 80,000 customer complaints monthly, according to Indian daily newspaper, Mint.
“Most service centers appeared overwhelmed by service requests and were struggling to provide adequate service quality (as expected from an Auto OEM in India),” HSBC analysts wrote in a note after visiting several Ola Electric service stations.
The analysts wrote that Ola Electric “did not invest” sufficiently in servicing capacity to match the volumes sold over the past two years.
“There is an acute shortage of skilled manpower and testing equipment in most centers. Plus, there is a clear lack of experience in the development and maintenance of service centers visible in many locations. Product issues were more than the company expected. Issues ranged from sensor and software problems in the hub motor to battery discharge during non-usage, while other regular service requirements also accumulated due to staff shortages,” the note added.
Ola Electric is also rapidly losing market share. The company commanded about 49% of the market in the quarter ended June, but its share had fallen to 27% by the end of September, according to figures published by the Indian government.
Meanwhile, Indian automotive giants Bajaj and TVS are ramping up their focus on electric vehicles — each now controls over 20% of the EV market.
Ola Electric founder and chief executive Bhavish Aggarwal (pictured above) last weekend mocked a comedian who had raised concerns about Ola Electric customers’ problems, alleging the comic had failed in his career and had taken bribes to criticize the company.