Ola Electric’s Q2 loss narrows, saying most service issues are ‘minor’
Ola Electric, India’s largest e-scooter maker by market share, on Friday reported a smaller second-quarter loss, helped by a rise in sales, and said the recent rise in service requests was largely due to “minor issues” .
The Bengaluru-based company said its consolidated loss fell to 4.95 billion rupees ($58.7 million) in the July-September quarter from 5.24 billion rupees a year earlier.
Ola’s quarterly revenue rose 39.1% to 12.14 billion rupees, helped by sales of mass-market models, or models priced below 100,000 rupees (about $1,186). Last year the company had not yet started delivering these models.
Ola Electric delivered a total of 98,619 two-wheelers between July and September, 73.6% more than last year. 56,545 mass models were sold.
Costs rose 21.8%, slower than the 26.6% increase in the previous quarter. Raw material costs, Ola’s largest expense, rose 46.7% but fell 18.2% sequentially.
Rising consumer complaints and regulatory scrutiny over allegations of poor service have cast a shadow on the SoftBank-backed e-scooter maker after a stellar market debut in August.
“Not all service requests that come in are complaints or issues with the product, many of them are regular check-ins or scheduled maintenance,” founder and chairman Bhavish Aggarwal said during an analyst call on Friday.
“Two-thirds of these are actually just minor issues, such as loose parts or customers not being familiar with the software being used,” Aggarwal said.
Shares of Ola Electric have fallen 5.5% since its listing on August 9, even as its dominance in the electric two-wheeler market has waned in recent months.
“In the second quarter we had a bit of a capacity challenge in service, our revenue was growing faster than we had expanded our service network,” Aggarwal said.
Reuters visited 35 Ola centers in 10 Indian states last year and found many were facing significant backlogs, with demand outstripping staffing levels or the supply of spare parts.
© Thomson Reuters 2024
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