Bhavish Aggarwal's Ola Electric engages EY for urgent service overhaul

The global consulting firm, EY, is expected to assist the electric two-wheeler maker in various service-related areas with a focus on streamlining business processes and optimising inventory

Bhavish Aggarwal-led Ola Electric, a leader in the electric two-wheeler market, has hired EY India to oversee its ‘service transformation’ amidst escalating after-sales service problems, increasing customer complaints, and declining sales figures, The Economic Times reported. The move comes as the company faces mounting pressure to improve its customer service experience.

The global consulting firm, EY, is expected to assist the electric two-wheeler maker in various service-related areas. The focus would include streamlining business processes and optimising the management of spare parts and inventory, the business-daily said citing sources. Business Standard could not independently verify the report.

A temporary three-month assignment

About a dozen executives from EY joined Ola Electric a few weeks ago for a three-month project. Depending on the results, the collaboration could be extended, the report said. The goal is to help Ola improve its processes, inventory management, and on-the-ground service availability, particularly in areas where sales are strong but service support is lacking. One of the biggest challenges has been the availability of spare parts and service personnel.

 

Bhavish Aggarwal is reportedly overseeing the entire process, signalling its significance to the company’s strategy, the report mentioned.

Ola’s response to mounting complaints

This strategic move comes in response to increasing customer dissatisfaction, with reports of Ola Electric vehicles gathering dust at service centres and as many as 80,000 customer complaints per month going viral on social media. The backlash caught the attention of both consumer watchdogs and policymakers.

Recently, the Central Consumer Protection Authority (CCPA) issued a show-cause notice to Ola Electric, citing potential violations of consumer rights, misleading advertisements, and unfair trade practices. The notice highlighted over 10,000 unresolved after-sales service complaints.

In response to these issues, Ola Electric has announced plans to expand its network of service centres, aiming to increase the number from 400 to 1,000 by the end of the year. However, industry insiders suggest that merely adding more centres may not solve the core issue. “Rather than expanding, the company should focus on improving the quality of existing service stations,” an expert remarked.

Ola’s declining sales and internal challenges

Ola Electric has struggled with a surge in customer complaints related to after-sales service, software malfunctions, and hardware defects. This has led to a drop in sales and market share over recent months. Compounding these issues is the company’s high attrition rate, with three heads of service resigning in the last two months.

Temporary sales boost amid festive discounts

Despite these setbacks, Ola Electric has seen a temporary surge in sales this month, thanks to heavy discounting. As of October 14, the company registered over 15,672 vehicles, boosting its market share to 34 per cent, according to data shared by the company from the Vahan portal. 

While this provides some relief for the electric vehicle maker, experts have warned that the spike is primarily driven by the festive season and deep discounts, which may not be sustainable in the long term. Additionally, this month’s sales figures still fall short compared to earlier months this year, noted market analysts.

Further complicating matters, Ola Electric recently received a communication from the Automotive Research Association of India (ARAI), a government certification body, questioning a price reduction on its S1 model that was lower than the price reported to ARAI for government subsidy purposes. Ola, in a filing, clarified that it has not altered the vehicle’s price but is running a “limited-time festive campaign.”