Moneycontrol PRO
you are here: HomeNewsBusiness

After delayed deliveries, Ola Electric customers run into fresh issues

Ola, which sold nearly Rs 1,200 crore worth of scooters in September 2021, is facing heat from customers for delays in providing test rides and delivery of scooters.

December 24, 2021 / 07:05 PM IST

After delayed deliveries, Ola Electric customers are now facing a range of issues with electric scooters that have been delivered to them, Moneycontrol has learnt.

Ola Electric, which was spun out of the ride-hailing major Ola in 2019, had started the deliveries of its electric scooters on December 15, a significant delay from its initial plans of an October delivery timeline. The firm said it had delivered scooters to 100 customers in Bengaluru and Chennai on the first day of deliveries.

However, customers who have received scooters are facing issues ranging from damaged vehicles with cracks and dents all over the body, delayed charger installations, and discrepancy in insurance policy among others. Users are also complaining about vehicles providing a significant lower mileage (range) in real world conditions than initially promised.

Karthik Varma, a customer who has purchased an Ola S1 Pro, told Moneycontrol that the scooter delivered to him had cracks and dents all over the body. The company told him they will repair the damaged parts and give the scooter, but Varma said he was against it "When you usually pay for a product, you pay for the new one, not the repaired one," he said.

He said the company declined to replace the scooter or cancel his booking since they have already done a temporary vehicle registration. He also asked for a concession due to the vehicle damage, which the firm declined.

Multiple customers said that while Ola had claimed a range of 181 km for the Pro variant at launch and these scooters were showing a range of 150-152 kilometres during the test rides, the delivered scooters were showing a range of only 135 kilometres after they were fully charged. Some of them said they even got a range of as low as 98-100 kilometres during the actual usage.

Users can request for a home charger installation for Rs 2,359 through the Ola app. However, this consists of only a charging socket, cable wiring and a wall mount bracket for users to hang their portable charger, rather than a separate home charger. In comparison, rival Ather provides a dedicated home charger Ather Dot to its customers for Rs 1,800.

Several disgruntled customers have also complained on Twitter that they were invited to the delivery event on December 15 and were promised deliveries in the coming days, but they are yet to receive the scooter or any intimation on when they will receive it.

Bloomberg reported on December 23 that Ola is facing manufacturing woes and is currently able to make only as many as 150 units a day. The company’s body shop is also operating at half capacity and its paint shop isn't functional as yet, it said.

The scooters were also delivered without a mobile app and several features such as hill-hold feature (making it easier to start from a stationary position on a slope without rolling back), voice-activated commands, remote unlocking through an app on a phone, playing music through the speakers, and visual moods that alter the sound and layout of the instrument cluster, are still missing from the scooter.

We have written to Ola seeking comment on how they plan to fix these issues and will update the story once we hear back. The company had told Moneycontrol earlier this week that the scooter "will continue to receive features over the air in the coming months"

Ola's troubles amid IPO plans

After selling nearly Rs 1,200 crore worth of scooters in September 2021, Ola has faced heat from customers for delays in providing test rides and delivery of scooters.

This move comes at a time when the firm is gearing up for a public market debut next year. On December 16, it raised $500 million debt financing from marquee international institutional investors through a Term Loan B route, joining the likes of Byju's and Oyo.

Prior to this, Ola Electric had raised about $52.7 million (Rs 398.3 crore) from investors such as Temasek, IIFL, Edelweiss, Vijay Shekhar Sharma’s VSS Investco and DST Global's Rahul Mehta, Moneycontrol reported on December 9. This financing came a couple of months after it raised $200 million financing led by Falcon Edge, SoftBank and others, at a valuation of $3 billion in September this year.

Separately, Ola also raised about $139 million (Rs 1,048.6 crore) from a clutch of investors including IIFL, Edelweiss, and Sunil Munjal-led Hero Enterprise, in what appears to be a pre-IPO financing round.

The company has witnessed a spate of exits in recent weeks, including its Chief Financial Officer Swayam Saurabh, Chief Operating Officer Gaurav Porwal, General Counsel Sandeep Chowdhury, and Ola Electric's Head of Quality Assurance Joseph Thomas among others.

Vikas SN
Vikas SN
first published: Dec 24, 2021 07:04 pm