“From Boom to Backlogs: Ola Electric’s Service Network Strain

Ola Electric, often likened to “Tesla on two wheels” by its CEO Bhavish Aggarwal, has seen a meteoric rise in the electric scooter (e-scooter) market in India. Since its inception, Ola Electric has sold 338,000 e-scooters in about two years and is now aiming for a stock-market listing. Aggarwal, known as India’s answer to Elon Musk, plans to quadruple the company’s annual production capacity to 2 million e-scooters by early next year. The company’s e-scooters are priced starting at about $1,000 and it is valued at $5.4 billion.

However, this rapid growth has brought significant challenges, particularly in its service network. Ola Electric’s network of over 400 service hubs is experiencing strains after a surge in sales. Staff at more than half of these centres, especially in major metropolitan areas, reported significant backlogs and long repair waiting times, stretching up to two weeks in some cases. This has led to issues like battery drainages, software glitches, and damaged wires, often exacerbated by the tough driving conditions in India. The service capacity issues have been acknowledged by Aggarwal, who has committed to expanding the service network by adding 100 new centres and hiring more technicians.

Despite these challenges, Aggarwal remains bullish about his business, citing substantial sales growth during India’s festive season. Ola Electric has established itself as a leader in India’s two-wheeler EV market, holding about a third of sales by volume. The company, which has attracted major investors like SoftBank and Singapore’s Temasek, is gearing up for a $700 million Indian IPO. This development comes as India’s e-scooter sales nearly tripled to over 700,000 in the year to March, thanks to Ola and rivals like Hero Electric and TVS Motor.

Yet, e-scooter sales in India still lag behind the sales of conventional scooters and motorbikes, with EV adoption significantly behind countries like the U.S. and China. The Indian government targets 70% of new two-wheeler sales to be EVs by 2030, a goal that Aggarwal ambitiously hopes to surpass by making all new scooters and motorbikes sold in India electric by the end of 2025​​.

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