Ola Electric Share Price Hits Lifetime Low Amid Ongoing Service Issues And Decline In Market Share

Ola Electric share price fell more than 9% on Monday, continuing a downward trend that has seen the stock decline nearly 10% over the past week and over 16% in the past month. The stock's price was down from its listing day closing price of Rs 91.2 on August 9, marking a life time low for the stock.

The stock closed in the red on Friday, down 0.21%, marking a significant drop for a company that initially experienced a surge after its IPO. The shares gained over 107% within two weeks before entering a consolidation phase.

The recent decline could be linked to persistent service challenges faced by Ola Electric, India’s largest electric two-wheeler manufacturer. A report by NDTV Profit highlighted ongoing issues with the Ola S1 scooters, as interviews with over a dozen customers in major markets like Mumbai and Bengaluru revealed malfunctioning hardware and glitching software. These problems have led to a backlog of service requests, with estimates indicating that nearly 100,000 complaints are logged nationwide each month.

In response to the service woes, Ola Electric founder Bhavish Aggarwal announced the introduction of Ola Electric’s HyperService for customers, aiming to double the company-owned service network to 1,000 centers by December.

The latest sales data from the VAHAN portal paints a stark picture for Ola Electric. In September, the company sold 22,800 units, a notable decline from 27,586 in August and a staggering 45% drop from July’s sales of 41,732 units. This downward trend is particularly concerning as Ola Electric had previously positioned itself as a leader in the burgeoning electric vehicle market.

In comparison, rivals Bajaj Auto Ltd., TVS Motor Co. and Ather Energy Ltd. clocked growth and gained market share.

The situation escalated over the weekend when a war of words broke out on social media between Aggarwal and stand-up comedian Kunal Kamra regarding the company's after-sales service quality. Kamra reacted to a post by Aggarwal showcasing Ola's gigafactory, sharing a photo of numerous Ola Electric scooters parked together, seemingly awaiting service.

The scrip fell as much as 9.59% to 89.55 apiece. It pared losses to trade 9.11% lower at Rs 90.03 apiece, as of 11:13 a.m. This compares to a 0.51 decline in the NSE Nifty 50 Index.

It has fallen 1.28% in the last 12 months. Total traded volume so far in the day stood at 1.8 times its 30-day average. The relative strength index was at 36.

Out of five analysts tracking the company, four maintain a 'buy' rating, and one suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 55.5%.