Big blow to Ola Electric: Quarterly loss reaches Rs 870 crore
Ola Electric, one of the largest companies in the Indian electric two-wheeler market, has suffered a huge financial setback in the first quarter of this year. The company’s quarterly loss has increased to Rs 870 crore. There are many reasons behind this, including more competition, discount offers, and decline in sales.
Reasons for jump in losses
The biggest reason for the increase in Ola Electric’s quarterly loss is the huge discounts on its electric scooters to outperform its competitors. Companies like Bajaj Auto, TVS Motors and Ather Energy have brought low-priced electric scooters in Ola’s market, which have significantly reduced Ola’s market share.
Apart from this, Ola Electric has been facing many challenges since its IPO launch. This includes declining sales, regulatory pressure and increasing competition.
Increasing debt and reduced revenue
Ola Electric has admitted that it is considering a plan to take a loan of about Rs 1,700 crore to meet its current obligations.
Meanwhile, the company’s operational revenue fell 61.8% to Rs 611 crore compared to the previous quarter. However, the company’s total expenses have come down by 31.6% to a level slightly above Rs 130 crore.
Increasing competition and falling market share
According to market analysts, the company’s average revenue per unit sale has declined. This is mainly due to discount offers and increased sales of low-priced scooters.
Ola Electric’s vehicle registrations fell more than 52% year-on-year to 56,760 units in the first quarter. The company’s entry-level electric scooters accounted for about 69.3%, up from 43.1% in the same period last year.
TVS Motor took the leading position
Recently, TVS Motors has taken the leading position in the electric two-wheeler market for the first time in the month of April, while Ola Electric slipped to second place. According to the data from the vehicle portal, TVS sales stood at around 19,736 units, while Ola sold 19,709 units.
Bajaj Auto stood third and Ather Energy fourth.
Maharashtra’s new EV policy raises hopes
The new electric vehicle policy announced by the Maharashtra government recently is expected to increase sales in the market. This policy provides subsidy and other incentives on the purchase of electric vehicles, which can become an improvement opportunity for Ola Electric.
In conclusion
Ola Electric faces many challenges, but with new policies and increasing demand in the market, the company has a chance to improve its position. However, for this Ola will have to improve its sales strategy, cost control and product portfolio.