The waiting period for the company’s electric scooters increased to 20-45 days from 5-7 days before February, managers at seven Ola Electric stores across New Delhi, Mumbai and Bengaluru told Mint.
However, Ola Electric said delivery times had improved, with the delivery time for customers now reduced from 12 days to 3-4 days, according to a company filing with the stock exchanges on Wednesday.
Two senior executives at one of the registration agencies told Mint on condition of anonymity that Ola Electric wanted a drastic reduction in the cost of registering vehicles.
“The company came to us one day last month and said they want to drastically cut the cost at which we were doing registrations. When we disagreed with the price they quoted, they stopped our work immediately,” one executive said.
According to the second executive, the price quoted by Bengaluru-based Ola Electric was one-third of what the company was charged previously.
Registration agencies streamline and quicken the process of vehicle registration in different states. As per the agency executives, the contentious issue with Ola Electric was the pricing of staffers required to enter registration data into Vahan, the transport department’s website.
The registration agencies are responsible for entering all the data entry as per local laws to generate vehicle numbers and deliver the number plates.
Drop in registrations
“The company did not have a problem with the cost of number plates which we were delivering. However, the work has also stopped on that. There hasn’t been any movement on the negotiations as well,” one agency executive said.
The delays were not entirely unexpected. Bhavish Aggarwal-led Ola Electric said it was renegotiating the terms of its agreements with Rosmerta Digital Services Pvt Ltd and Shimnit India Pvt Ltd, the registration agencies, to reduce costs and enhance process efficiencies, according to the company’s filing with the stock exchanges on 19 February.
“Due to ongoing negotiations and optimization of the registration process, our registration numbers for the month of February 2025 (on VAHAN portal) will be temporarily impacted. Our sales continue to be strong through February 2025 and the dip in registration will be streamlined in the next few weeks,” Ola Electric said.
However, Ola Electric registered just over 13,000 vehicles since 1 February, data on the Vahan portal showed. Comparatively, the company registered 24,377 vehicles in January.
Mint has learnt that the agencies charged Ola ₹1,400-1,600 for registering each electric vehicle. Ola Electric needs these agencies even more due to its direct-to-consumer model.
The company doesn’t have a traditional dealership network but instead operates a network of experience stores. The work at these stores involves facilitating the sale of Ola scooters through its online platform and helping the customers get the delivery.
Unlike in traditional dealerships, the managers at these stores cannot get registrations done. Ola used to send customer details to the agencies electronically to get the registration done. However, the work stalled due to the renegotiations and the registrations fell drastically.
Ola Electric indicated that the delays were temporary and said that the vehicle registration process transformation was “in its final stages.”
“The company’s daily registrations have improved significantly, increasing to over 800 per day and crossing the average daily sales” for January and February this year, Ola Electric said in the filing Wednesday.
However, the disruption in the registration process hurt customer experiences, the store managers said.
“Registrations are on hold, which is why we are not able to deliver products to customers. The waiting time has crossed a month for most of the products,” a store manager in the national capital said.
As per the store managers, Ola Electric delivers scooters to customers with the final registration number plates. It does not dispatch vehicles with temporary registration plates, a practice typically followed by other vehicle manufacturers and auto dealers.
Queries sent to Ola Electric remained unanswered.
Several Ola Electric buyers took to social media to complain about the delayed deliveries. Many complained that the company had not met the timelines promised when they bought the scooters.
Ola Electric’s rivals don’t have any delivery problems. Visits to the stores of Ather, Hero and TVS showed that they concluded the delivery and registration of vehicles in about a week.
Leadership battle
Ola Electric’s struggles come as competition in the electric two-wheeler space ramps up. Although it has led the market share battle over the past couple of years, Bajaj and TVS dethroned the company from its top spot.
Bajaj recorded a 25% market share in December, followed by TVS at 23.5% and Ola Electric at 19%. However, the company regained leadership in January with a 26% market share.
Although Ola Electric claimed it led the market with a 25% market share in February, there is no clarity on when the registration of all the 25,000 vehicles it claims to have sold will be completed.
Ola Electric registered about 4,207 vehicles in the first 12 days of March. Bajaj, TVS and Ather registered 8,017, 6,984 and 4,017 vehicles, respectively, so far this month.
Mint could not independently ascertain whether Ola Electric has forged new partnerships with the registration agencies.
“There are not many registration players in the country to deliver on the scale Ola needs. Moreover, there wouldn’t be major difference in pricing,” the second executive said.
Elusive target
Any hit to sales due to registration woes will come as a blow to Ola Electric, which has targeted sales of 50,000 units per month. Aggarwal said on the February 7 earnings call that the company needs to achieve this target to break even and turn profitable.
“We do feel in the next few quarters we can get to about 50,000 monthly sales, which takes us to an auto segment EBITDA positive,” he said.
The company recorded a loss of ₹564 crore in the October-December period against a ₹376 crore loss in the year-ago period. In bid to cut costs, the company laid off over 1,000 employees, Bloomberg reported.
The company said in the exchange filing on Wednesday that its cost-reduction programme since November 2024 helped it save ₹90 crore every month. Ola Electric added that it expects to achieve automotive segment EBITDA breakeven for the next quarter (Q1 of FY26).
The cost-cutting measured included shutting all regional warehouses and shipping vehicles, spare parts and accessories from the factory directly to stores, automating registration, and productivity improvements in sales and services.
Investors, too, have become wary. After the company informed the exchanges about the renegotiations on 19 February, Ola Electric’s share price has fallen by over 17% on the BSE compared with a 5% decline in the BSE Auto index. The company’s shares are trading 33% below the price at which it listed in August 2024.
“Investors will prefer to wait and watch how Ola Electric deals with its issues. The next few quarters are very crucial for the firm as the share price will be driven by earnings,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.
Leave a Reply