Ola Electric’s shares surged over 6% in early trading on December 26, following the company’s announcement of significant milestones in its expansion and innovation strategy. The electric vehicle (EV) startup revealed that it has opened 3,200 new stores across India, bringing its total network of showrooms and service centers to 4,000.
Market Performance: Strong Intraday Gains
The company’s stock rose by as much as 6.2% during intraday trading, reaching INR 99.90 on the Bombay Stock Exchange (BSE). At the time of reporting, Ola Electric commanded a market capitalization of INR 42,141.07 crore (approximately $4.94 billion).
Ola Electric made its stock market debut on August 9, with a flat listing at INR 75.99 per share compared to its IPO issue price of INR 76. The stock peaked at an all-time high of INR 157.53 on August 20, driven by strong investor enthusiasm. However, the shares have since faced challenges, closing in the red in 8 of the past 15 trading sessions.
)
Challenges in Market Share
Ola Electric’s market share in the electric two-wheeler segment has declined significantly. According to Vahan data, its market share dropped to 24% in November 2024, compared to 46.1% in June. Meanwhile, competitors like TVS Motor and Bajaj Auto have gained ground, increasing their market shares from 14.8% to 23% and 11.3% to 22%, respectively.
This decline can be attributed to several factors, including consumer complaints regarding after-sales service, incidents of vehicle fires, and concerns over CEO Bhavish Aggarwal’s handling of negative publicity.
Strategic Moves: New Products and Expanding Reach
Despite these headwinds, Ola Electric continues to focus on expanding its product offerings and entering new market segments to boost revenue and profitability.
Launch of Limited-Edition Scooter
Recently, Ola introduced a limited-edition e-scooter, the ‘Ola S1 Pro Sona,’ along with the beta version of its MoveOS 5 software. The update brings features such as group navigation, live location sharing, and smart charging, enhancing the user experience for Ola riders.
Entry into New Segments
The company has announced plans to enter the EV three-wheeler market, aiming to compete with established players like Mahindra, Bajaj Auto, Euler Motors, and Altigreen. At its annual Ola Sankalp 2024 event, the startup unveiled its Roadster series of electric motorbikes, which are expected to hit the roads in January 2025.
Financial Performance: Revenue Growth Amid Losses
Ola Electric reported a 5.5% reduction in consolidated net losses during Q2 FY25, which stood at INR 495 crore compared to INR 524 crore in the corresponding quarter of the previous year.
The company’s operating revenue witnessed a robust growth of nearly 39%, reaching INR 1,214 crore during the quarter under review, up from INR 873 crore in Q2 FY24. This growth underscores the company’s ability to leverage its expanding portfolio and customer base despite operational challenges.
Future Outlook: Aiming for Market Leadership
Ola Electric’s aggressive expansion of its store network, combined with its focus on product innovation, reflects its commitment to maintaining a strong presence in India’s burgeoning EV market. While the company faces stiff competition and challenges in regaining lost market share, its recent initiatives are geared toward reinforcing its position as a leader in the EV space.
Moreover, with the upcoming launch of its electric motorbikes and continued investment in software updates, the company is positioning itself to attract a broader customer base. Analysts believe Ola’s focus on innovation and infrastructure could yield positive results in the long run, provided it addresses operational shortcomings and market competition effectively.
As of December 26, Ola Electric’s shares were trading 0.86% higher at INR 94.86 on the BSE, signaling cautious optimism among investors. Investors may take it as a ray of hope amid the issues the company faces.