Chief executive Bhavish Aggarwal termed the second quarter as a seasonally weak period, and during an earnings call predicted a recovery from the ongoing three-month period ending December.
He also underscored the increased competitive intensity in the two-wheeler market.
“The gross margin specifically for the (company’s) auto segment is 20.6% which is flat quarter on quarter, and this is despite enhanced competitive dynamics in the industry. The key highlight for us in Q2 has been that we have maintained our market leadership, our market share is around 33% and there is also a quarter level competitive action that got aggressive,” Aggarwal said.
ET had reported that in September Ola Electric’s market share dropped to 27% from 31% in August, as larger two-wheeler makers Bajaj Auto and TVS Motor gained ground in the EV market. The company had a peak market share of 58% in May this year.
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Aggarwal told analysts that the company aims to grow at a rate of 30% year-on-year from here on.During the three-month period ended September 30, Ola Electric’s operational performance took a hit sequentially with the company reporting a negative Ebitda margin of 28.4%, compared with a negative 9.6% in the previous quarter.
Lately, Ola Electric has been announcing sale events in an effort to ramp up its sales. On October 10, it launched the ‘Biggest Ola Season Sale’, a three-day campaign offering discounts on the S1 electric scooter lineup.
Aggarwal said the company took one-time expenses during the quarter pertaining to its initial public offering in August.
On Friday, its shares ended trading 2.5% down at Rs 72.74 on the BSE. The results were announced after market hours.
Servicing issues
Over the past few months, the company has come under fire for issues around its servicing network and complaints about its products.
Aggarwal acknowledged that the company’s rapid sales growth outpaced its service network. He said Ola Electric will have more than 3,000 retail stores by March 2025, co-located with service infrastructure. These will include 2,000 company-owned locations and another 1,000 from network partners.
Most of the backlogs due to capacity issues have been resolved, he said, adding that more than two-thirds of customer complaints involve minor issues that do not require parts replacement.
The Central Consumer Protection Authority had issued a notice to the company over consumer complaints. Ola Electric responded to the notice saying that it had resolved 99.1% of the existing complaints.
Ola Electric, meanwhile, is not slowing down on new product launches.
The firm announced plans to launch 20 new products across two- and three-wheeler categories over the next two years, with at least one new release per quarter.
Currently, the company has six models in a price range of Rs 75,000 to Rs 150,000. While it started out with only a premium range of scooters, Ola Electric’s mass segment products now account for more than half of its quarterly volumes.