Executives at Ola Electric would have rejoiced at the spectacle of the company dethroning segment-leader and one of its oldest incumbents, Hero Electric, for the pole position in India’s most lucrative mobility space — electric two-wheelers. Even as the traditional internal combustion engine (ICE)-powered two-wheeler market has alarmingly declined, the electric two-wheeler market has spurted at an eye-watering pace, even though on a low base.
Ola Electric sold 12,691 vehicles in April — over-powering the oldest incumbent, Hero Electric, which sold 6,572 vehicles. Okinawa Autotech was the second-highest selling brand in the segment — clocking in sales of 11,012 vehicles.
Bhavish Aggarwal, the head honcho and the face of Ola Electric, known to not mince words, took to Twitter to celebrate the feat. “We’re shaking up the incumbents and vested interests. They better focus on their products rather than fake narratives against us! Customers and markets have voted for facts and truth. We’re just getting started,” reads his tweet.
Ola Electric’s market share grew by 39% when compared to March. It may be noted that Ola Electric has been able to dethrone the incumbents within five months of launching its scooter in the market. What makes the achievement an epochal moment for the Bengaluru-based company is that recently, it was fending off brickbats to protect its credibility to drive India’s electric mobility story.
“We may not agree with the way Ola Electric’s D2C model, but what you cannot take away from them is that they have inimitably captured the imagination of the people,” Vinkesh Gulati, president of the Federation of Automobile Dealers Association (FADA) tells Fortune India. Gulati has been critical of how Ola Electric has circumvented the dealer in selling its scooters.
“While Ola Electric is trying to be a first of its kind OEM in India by going directly to the customers, it didn’t realise that dealers are a critical part of the value chain who keep on ground systems in place for a seamless customer experience,” he had remarked earlier.
Gulati was also sceptical of the three-to-four-week delivery timeline. “As a dealer, we generally register any vehicle in an hour to a maximum of five days’ time after the full payment is received, but according to Ola Electric, dispatching, with registering the vehicles, takes three to four weeks. It is unimaginable that a customer will give full payment to the dealer and wait that long to take delivery,” he explained in an earlier conversation.
However, he now alludes that this was all a facade that was created by Ola Electric, ostensibly to hype demand for their products. “They are able to create demand for their products, be it positively or negatively. RTOs normally don’t take this much time to process,” he explains.
When Ola Electric was castigated for making lofty promises, and doling out a lesser number of vehicles, it maintained the hurdles it hit are part of the paradigm shift — that of D2C becoming omnipresent across sectors — the Indian consumer is currently going through. The company tells Fortune India that these were impediments in its early adoption of the model, and they were scaling up operations to streamline the process.
The company also clarifies that claims suggesting the RTO registration process was delegated to third-party vendors is a misnomer — Ola Electric has contractual partners for doorstep delivery, and assumes oversight and ownership of the entire process — from the factory-floor to delivery. Ola’s D2C model has also enabled the company to deliver its scooters to far-flung corners of the country, where most dealerships don’t exist.
The strongest arrow in Ola Electric’s quiver remains its Futurefactory. A sprawling, integrated manufacturing facility, it has enabled the company, according to Aggarwal’s own testimony, to manufacture around 1,000 scooters every day. He also disclosed in a recent media engagement that the company has produced more than 50,000 scooters so far. It is also ramping up production to an envisaged capacity of 10 million units annually — spread across 100 acres, and it will also ensure over 90% of parts are localised and in close proximity. “Today EVs have become a production game, and Ola Electric should be extolled that the company has been able to beat everyone else,” Gulati adds.
Ola Electric’s commitment to building a facility imitating the Gigafactory units of Tesla has given it an edge over incumbents, who have struggled to keep up a steady rate of production. “Ather Energy was only able to produce 30% of its order book; Hero didn’t produce a single vehicle last month. From that perspective, Ola Electric has been able to deliver a lot more than they could,” Gulati claims. He also adds the flip side of the coin is that the company delivered considerably less than what it promised, but what it delivered is a lot more than what incumbents did. “Others did not anticipate that the demand would hit through the roof as early as 2022.”
The Bengaluru-based company has overtaken Hero Electric, and it would be difficult for the latter to reclaim the pole position until it is able to match the production prowess. “Ola did well in April; they will do even better in May,” Gulati expects.