Ola, which was founded in 2010, brilliantly expanded from a ride-hailing service into electric vehicles and battery technology, swiftly becoming a household name and rivaling global giants like Uber. The company further diversified in 2023 with the launch of Krutrim, touted as India’s first AI-driven initiative with a valuation exceeding $1 billion, drawing investments from prominent backers like SoftBank and Tiger Global.
Despite the promising start, Ola's electric vehicle (EV) division has suffered a drastic downturn, seeing approximately 70% of its market value evaporate within just seven months of a record-breaking IPO that raised around $734 million in 2024. This decline is compounded by intense competition from established manufacturers and increasing regulatory scrutiny.
The sales figures paint a concerning picture, revealing that Ola's scooter sales have plummeted to less than half of what they were in April of the previous year. Reports of scooters catching fire and breaking down mid-ride have circulated on social media, raising alarms about product safety. Additionally, government investigations into the company's operational practices have further strained its reputation.
Cumulatively, Ola has struggled with operations and finance. Job cuts and restructuring have become the norm, as the company attempts to stabilize its finances, letting go of more than 1,000 employees since last November. In response to a wide array of questions from the media, Ola largely pointed to previous press statements without addressing new allegations.
Former employees are shedding light on the rapid pace at which the EVs were brought to market, stating that the initial design replicated an Etergo scooter without necessary alterations, which may have compromised safety and performance. Early reports hinted at possible manufacturing defects, with significant safety concerns arising from incidents involving faulty battery management systems.
Rival companies have since entered the market, further complicating Ola's recovery efforts. While Ola aims to sell 50,000 of its scooters monthly to regain profitability, market analysts express skepticism about this goal due to a significant drop in the company's market share from 52% to as low as 19% before a recent recovery.
Amidst this struggle, customers have frequently complained of poor service, with many reports going unanswered for days. Ola’s move to directly sell scooters instead of employing traditional dealers limited consumer support options and amplified dissatisfaction.
The swift decline in Ola's fortunes is making investors anxious, particularly those who invested during the IPO. Observers point out that Ola's ambitious initiatives, including subsidies for EV manufacturing and a delayed gigafactory project, are now more critical than ever.
Critically, specialists warn that the turbulence Ola faces reflects deeper cultural challenges common among start-ups, notably in decision-signing and unrealistic project timelines. As the company strives to navigate these obstacles, mounting executive turnover and leadership instability further complicate its path to recovery.
