What exactly is the problem with Ola Electric Scooter?
In July 2021, Bhavish Aggarwal, Ola’s CEO had said in a tweet – “India’s EV revolution begins today!”.
It was because Ola electric scooters were open for bookings and one could reserve a scooter starting from just INR499. Ola electric scooter announced that it got over 1,00,000 bookings within just 24 hours. Even before delivering the scooters, Ola electric encased INR 1,100 crores as pre-booking charges in September 2021.
For more info go to Ola Electric.
Now all of this sounds grand that Indian customers are awaiting the EV revolution. But several customers were left disappointed. Many users have been posting on Twitter that they have no updates on whether Ola electric would deliver their scooter by 31st Dec 2021.
Which was Ola electric scooter’s delivery promise date. Some users have received their scooter, but they’re unhappy about the quality of the product.
For instance, Karthik Varma tweeted photos of his Ola S1 Pro scooter and said that “it has cracks and dents all over the body.” Due to repeated delays, some customers even canceled their orders but are still awaiting a refund.
Recently, on Dec 15th, Ola electric scooter organized an event for 100 customers in Chennai and Bengaluru when they were making Ola S1 deliveries, but in the end, the customers were not allowed to take scooters home.
So, what happened?! Why is Ola struggling – this remains a key question that we will analyze in this Blog.
Ola Electric’s Background
First, let’s understand how Ola Electric garnered such huge limelight. Ola’s “Mission: Electric” was announced in 2018, and the objective of their mission was to have 10 lakh EVs on the Indian road by 2021. The business announced the construction of a “Ola Future Factory” manufacturing factory at Krishnagiri, Tamil Nadu, with an investment of Rs 2,400 crore.
Bhavish Aggarwal also announced that the Factory would be run entirely by women Manufacturing put aside, many customers were excited about these scooters due to their software features. As if this was not a scooter but a mobile phone or even an Apple product.
The buying process of the scooter was also completely online. The optimism around Electric vehicles made Ola excited about its scooters.
For example, in September 2021, Mumbai’s transport authority announced tenders to procure around 2,000 fully-electric buses, and the central government announced in November that all govt vehicles may go electric soon.
In the Western markets, we have seen the adoption of EVs due to companies like Tesla. Ola electric scooter wants to pull off the same in India. This excitement about EVs is what made Ola also excited about the scooters. But where did things go wrong?
In this post, we’ll focus on three issues in particular.
1) The CEO sets unrealistic deadlines.
First, Bhavish Aggarwal, CEO of Ola electric set unrealistic deadlines.
Pradip K. Sinha wrote in his article in The Morning Context that the CEO of Ola pushes unrealistic deadlines on social media, creating hype and stalling, giving the impression that things are much closer to completion. The majority of the time, however, this is not the case. The employees of the Ola electric scooter have to bear the brunt of that.
For example, one executive explained that bookings for the scooters were set to begin from 8 September but as the deadline came closer, it became clearer that it was almost impossible to meet the deadline because the website wasn’t ready.
That is why Ola Electric called in a software engineer to fix the website overnight. But the very next day, the engineer was fired because CEO Bhavish Aggarwal had to publish a public apology when the deadline was not met.
And this deadline kept on changing. From September to October, from October to November, and then from November to December because Ola revealed that there was an ongoing global chip shortage. But the chip shortage problem was not a new one.
Maybe the issue was bigger than that, A former executive told The Morning Context in December, “The reality is that the scooters are not ready. They are probably 60% ready, which is a huge feat, given the company started working on them sometime in March this year.”
This is why he didn’t feel that Ola electric scooter could make deliveries anytime soon. The concern is that Bhavish wanted the deliveries by December. The Ola executive believes that Bhavesh is the kind of man who thinks it is possible to have a child in one month. With that, we come to our second problem.
2) Unfinished product
The scooters are still not a finished product. In November, Ola Electric scooter hosted an event for journalists to test-ride Ola scooters. At the event, the journalist from The Ken observed that the navigation feature on the scooter’s touchscreen was not smooth.
One of the journalists reported that their scooter went into reverse even though it was not set to reverse. Ola’s executives are themselves not sure about the product.
A current executive told The Ken, “We’re still not sure if the scooter is a 10/10 or 8/10″. The same executive told The Ken, “I was shocked when I heard about the vehicle launch because some software modules weren’t developed and tested. During the initial testing phase, several issues were discovered”.
3) Axis of extinction
The third problem of Ola Electrics is that several senior executives have quit the company recently. At least eight top executives at Ola Electric scooter have spent an average of only 1-2 years at Ola. How does one build a world-class company if top executives are staying only for 1-2 years?
Let us talk about Ola’s CTO. Ankit Bhati was Ola’s CTO (chief technology officer). According to media reports, he quit the company when he was not given powers of decision-making in the projects of Ola Electric scooter.
After Bhati’s departure, Brijraj Vaghani was appointed as CTO But after some time, he quit as well. “The firm has been without a CTO for about 18 months,” a former executive stated. “How do you manage a tech firm without a chief technology officer?”
Why did Ola make the switch to electric scooters?
Now a lot of you would ask, given these issues, why did Ola even want to get into manufacturing Ola Electric scooter?
Morning Context revealed that there were two key reasons behind this. First, it is the nature of the CEO of Ola- Bhavish Aggarwal. He can’t focus on one thing for too long Second, the cab business of Ola is not profitable and nothing else Bhavish has tried has worked so far.
For instance, all the different things Ola has tried- cabs, manufacturing, food, finance, the list goes on. Outside of cab-hailing, however, nothing has grown successfully.
A former executive even asked during an interview, “Did you know Ola has a pizza brand?” Because Ola’s other companies aren’t performing so well, and the company’s worth has been unchanged for the past two years, Ola is wagering that electric vehicles will be our future, and the Ola electric scooter might play a significant role in that.
An Ola executive explained, “The cab-hailing business is finite. If you put together Ola and Uber, they are at, say, 100,(market size), and the market opportunity is about 120. So the opportunity to grow in the core business is not very high.”
What will happen to Ola electric Scooter?
But it is difficult to say whether the dream of the Ola Electric scooter would come true in the future or not? A lot of people have criticized the working style of CEO, Bhavish Aggarwal. An executive says that even minor decisions cannot be taken without his approval which could be the root cause of the problems discussed in this article.
But it’s not that there are only problems with the Ola Electric scooter.
A lot of customers have received their deliveries. To be honest, it would be good for the country’s development of Ola electric scooter performance.
And the government is also pushing for EVs in their recent policies. But only time will tell whether Ola’s electric scooters would be successful in their journey or not?
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