Ola Electric: Under fire, Ola Electric taps EY India to get back on track

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Electric two-wheeler market leader Ola Electric has engaged EY India for a “service transformation” amid mounting after-sales service issues, a barrage of consumer complaints and declining sales volumes, multiple people aware of the development said.

The global consulting services firm is likely to advise the Bhavish Aggarwal-run startup on a whole host of service-related aspects of the business, from streamlining business processes to stocking and inventory management of spare parts, they said.

An email sent to an Ola Electric spokesperson remained unanswered until press time Tuesday.

A spokesperson at EY India said, the firm is “unable to share comments on a client engagement.”

Close to a dozen executives from EY came on-board at Ola Electric a few weeks ago on deputation for the three-month project, the tenure of which can be extended depending on the outcome, people cited above said.


They will help the firm in managing the immediate crisis and establishing the processes and systems.

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“EY is helping Ola in streamlining the business processes, inventory management of spare parts and improving an on-ground presence in places where it has sales but no service,” a person cited above said. Availability of spares and people who can deliver services has been a major issue, he added.Aggarwal is closely involved in the whole process with the team, the person said.

The firefighting move comes after images of Ola Electric models gathering dust at its service centres and the number of customer complaints—as high as 80,000 a month—went viral on social media, prompting consumer watchdog and policy makers to take notice.

Last week, the Central Consumer Protection Authority (CCPA) issued a show-cause notice to Ola Electric for alleged violation of consumer rights, misleading advertisements, and unfair trade practices with over 10,000 unaddressed after-sales service complaints.

Ola Electric plans to increase the number of its service centres to 1,000 from 400 now by the end of the current year.

“More than adding to the service stations, they should focus on improving the quality of the existing ones,” an industry expert said.

The Bengaluru-based firm has been grappling with increased customer complaints over after-sales service, software glitches and hardware issues, leading to a decline in sales and market share over the past few months. A high attrition rate with at least three service heads leaving in the last two months has added to the company’s internal crisis.

Its volumes in the first half of this fiscal have dropped by almost a fourth to about 483,00 units from about 643,000 a year earlier, according to a recent research report by Elara Securities based on the government’s Vahan portal data. Its market share in the same period has shrunk to 32.4% from 40.4%.

However, this month, led by heavy discounting, Ola Electric has recorded more than 15,672 registrations so far (as of October 14) with a market share of 34%, the company said in an exchange filing on Monday, quoting Vahan data.

The company, though, received a letter from Automotive Research Association of India (ARAI) – the government’s testing and certification agency – over reducing the prices of S1 to less than the price it declared to ARAI for availing the government subsidy. Ola in an exchange filing on Tuesday said it has not changed the price of the vehicle but is “running a very limited time festive campaign for a brief period.”



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