Setting the pace: Ola Electric sees momentum continuing after record March

Ola's CMO, Anshul Khandelwal, also pointed out that there have been fundamental changes in the buying patterns of customers - for instance, more women are now buying electric vehicles than earlier

Led by Ola Electric, which registered an industry record of 53,186 vehicles in March, electric two-wheeler (e2W) penetration hit a record at 8.91 per cent — the highest ever for a month (based on Vahan data).

The company’s Chief Marketing Officer Anshul Khandelwal says that they see the momentum continuing in 2024-25 as they now have e2ws that will be delivered from April, focused on the affordable mass market, thus covering the entire price spectrum for customers.

When asked whether the March numbers were an exception because companies were liquidating their stocks as Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME-II) was being replaced with a new scheme in which subsidies have been halved and capped at only Rs 10,000, Khandelwal said: “In May last year when subsidies were dropped by a third, it gave a huge jolt to the industry, and prices had to be increased substantially by Rs 25,000 to Rs 30,000, leading to a slowdown in sales. Also, at that time, one only had premium products over Rs 1 lakh. But now Ola has been able to bring down its cost of production substantially by scale and engineering; it has more models, especially an entire range in the value and affordable segment. So a reduction in subsidy won’t make much of a difference to growth.”

Khandelwal also pointed out that there have been fundamental changes in the buying patterns of customers — for instance, more women are now buying electric vehicles than earlier when it was only 10 per cent two years ago, now accounting for 25-30 per cent.

From young early adopters, Ola’s electric scooters in the premium range are being bought by consumers between the ages of 35 years and 40 years.

With the introduction of a more affordable Ola X range e2Ws, the growth of their sales in markets like Bihar, Uttar Pradesh, and Rajasthan has been faster than earlier.

However, Khandelwal said that both the premium as well as the affordable segment of the e2w is growing.

“What we are seeing is that both the premium electric scooter, which is at Rs 1.1 lakh and above and the affordable mass scooter which starts from Rs 79,999, are growing. For instance, the X range is being bought by traders, small businessmen, sales agents, etc., for whom price is key. But now we are seeing 35-40-year-olds buying the premium range as we have made it more attractive by reducing their price.”

The company expects its X range to give them volumes — these include the 2 kilowatt hour (kWh) powered S1 X2 at Rs 79,999, and the S1 X4 (4 kWh) for Rs 1.09 lakh — which Khandelwal said offers both an attractive price as well as a good range which consumers want.

However, despite the industry push in March, the industry still failed to cross the projected 1 million mark in 2023-24 (FY24), ending at 900,000 e2Ws. The industry had estimated that in FY24, sales would reach over 1.2 million.

The penetration of e2Ws for the entire FY24 was at 5.38 per cent, up from 4.4 per cent in 2022-23, yet far behind the 10 per cent that many vehicle makers had earlier expected would be possible. However, the good news is that registrations for the industry were up by 33 per cent in FY24 over the previous year.

 

SETTING THE PACE

·         Ola Electric expects the growth momentum of the last quarter to continue in 2023-24

·         Women account for 25-30% of sales of Ola

·         Premium scooters are now attracting the age group of 35-40 years and not just early adopters

·         Sales in states like Uttar Pradesh, Bihar, and Rajasthan have seen a kick-up with affordable Ola                      scooters