Ola Electric, the electric vehicle (EV) company led by Bhavish Aggarwal, is undergoing a turbulent phase marked by layoffs, financial struggles, and intensified scrutiny from authorities. Reports suggest that the company is set to cut around 500 jobs across various departments as part of a restructuring initiative aimed at improving operational efficiency and driving profitability.
Layoffs to Streamline Operations
According to industry insiders, the layoffs are designed to eliminate redundancies and optimize costs amid a challenging market environment. The restructuring effort, though lacking a defined timeline, underscores Ola Electric’s bid to stabilize margins. The company has yet to officially confirm the layoffs or provide specific details about the departments affected.
Financial Woes
Ola Electric reported a 43% increase in its net loss for the July-September quarter (Q2 FY25), amounting to ₹495 crore compared to ₹347 crore in the previous quarter. Revenue also took a hit, declining 26% to ₹1,214 crore from ₹1,644 crore in Q1 FY25.
Despite these setbacks, Aggarwal emphasized during the post-earnings call that operating expenses had decreased quarter-on-quarter, suggesting the company is focusing on cost efficiency as a pathway to recovery. “As we continue to scale distribution, revenue will grow while operating expenses remain stable or decrease,” he stated.
Declining Market Share
Ola Electric’s market share in the electric two-wheeler segment dropped from 49% in Q1 FY25 to 33% in Q2. Increased competition and service network issues have been cited as significant factors contributing to this decline.
Additionally, consumer complaints regarding software glitches, battery performance, and mechanical failures like jammed tyres have further dented the company’s reputation. The Central Consumer Protection Authority (CCPA) has initiated a probe into the company’s practices concerning consumer grievances.
Stock Market Slump
Ola Electric’s stock has also faced a dramatic decline, eroding over ₹38,000 crore in investor wealth within a few months. The share price, which debuted at ₹76, is currently hovering around ₹67—a stark contrast to its all-time high of₹157.40. The company’s market capitalization has shrunk from₹69,000 crore to₹31,000 crore, highlighting the scale of the financial challenges.
Navigating Tough Times
Experts attribute Ola Electric’s difficulties to growing competition in the EV sector, coupled with operational inefficiencies and customer dissatisfaction. While the company remains a major player in the EV market, addressing its financial losses, improving product quality, and regaining consumer trust will be critical for its long-term viability.
As Ola Electric navigates this turbulent period, all eyes will be on how it addresses these challenges and charts a path toward recovery.
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