Customers of Indian electric car maker Ola Electric are not satisfied with the company’s services or scooters, impacting the company’s stock price and market share. The company’s shares fell as much as 9.1% to 89.14 pounds on Monday, taking its market capitalization below $4.75 billion for the first time since its August IPO.
The company’s shares are still trading above their August IPO price, but have fallen more than 40% from a high of 157 rupees (about $1.87) to a low of 89 rupees (about $1.06).
Monday’s stock decline coincided with a spike in customer complaints about the reliability and performance of the company’s scooters. The startup reportedly receives more than 80,000 customer complaints every month, according to Indian daily Mint.
“Most service centers are overwhelmed with service requests and appear to be struggling to provide adequate quality of service (as expected from an Indian auto OEM),” said several HSBC analysts. wrote in a note after visiting Ola Electric service station.
Analysts wrote that Ola Electric “did not invest” enough in service capabilities to match its sales volumes over the past two years.
“Most centers have a severe shortage of skilled personnel and testing equipment. Furthermore, there is a clear lack of experience in developing and maintaining service centers found in many locations. The problems ranged from problems with hub motor sensors and software to battery discharge when not in use, but other routine service requirements have also accumulated due to staffing shortages.” added.
OLA electric’s stock price since its IPO. Image credit: Google
Ola Electric is also rapidly losing market share. The company held about 49% of the market in the quarter ending June, but its share had fallen to 27% by the end of September, according to figures released by the Indian government.
Meanwhile, Indian auto giants Bajaj and TVS are increasing their focus on electric vehicles, with the two companies currently controlling more than 20% of the EV market.
Over the weekend, Ola Electric founder and CEO Bhavish Agarwal (pictured above) mocked a comedian who had raised concerns about issues with Ola Electric’s customers, saying the comedian had failed in his career and was forced to leave the company. He claimed that he had been bribed to criticize him.
