A Business Giant at Its Trough: Ola’s EV Crisis Explained
It’s interesting to watch a company move from revolutionizing a market to struggling for survival.
Today’s Failed Friday Finds story is quite similar to the last one. The company we’re going to look at today is very familiar to us, and most of us have probably used their services. They are still running successfully as a company… but one of their products is failing badly. Their investors are leaving, and their stock price has fallen to a great extent.
In economics, there’s a concept called the business cycle, which has four phases:
Boom
Recession
Depression
Recovery
There is also a term called “trough”, which represents the lowest point — the stage where a business needs an extra hand to come out of the depression phase. And right now… Ola is exactly in that stage.
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You see, Ola was the one who organized the local cab market with an app that connected customers and drivers. Customers finally knew which cabs were available, drivers got more bookings than usual, and there was transparency in pricing and distance. Cab travel became easier and more reliable.
But like I mentioned earlier, the story of Ola and Byju’s shares the same pattern: They made more losses than revenue in their cab service business. So the founder shifted focus to a new market — electric vehicles — and bought an EV scooter company.
When they launched their scooter, a strong competitor was already waiting: Ather.
Instead of spending on ads, Ola used their mobile app and pushed just one notification to market their EV. And that decision went completely wrong.
They promoted their product as being priced under 1 lakh and claimed it had similar features to Ather. Since Ather scooters were more expensive, people rushed to book Ola scooters. But then the real problem began — there was no proper supply. Deliveries were delayed, and once the scooters finally reached customers, the issues only grew worse.
Their service was extremely poor. The scooters started malfunctioning very soon after launch, and service centers became flooded with Ola scooters. They didn’t create different variants properly — each model had different spare parts, so servicing each scooter took more time than usual. Every repair required a new plan, and this made customers even more frustrated.
On top of that, battery fires began to occur, and in some cases, angry customers even burned their scooters in front of service centers.
They didn’t focus on product quality, and now they are paying the price for it.
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