Ola Electric Shares Plunge 9% After Public Feud Sparks Service Concerns
Business
Shares of Ola Electric, India's leading e-scooter manufacturer, plummeted 9% on Monday following a heated online exchange between the company's founder and a popular comedian. The controversy has reignited concerns about customer service issues at the SoftBank-backed firm, which is already grappling with declining sales.
The firestorm began when Indian stand-up comic Kunal Kamra shared an undated photo with his 2.4 million Twitter followers showing dozens of dust-covered Ola electric scooters parked outside what appeared to be a company showroom. The viral post opened floodgates to numerous complaints from other dissatisfied customers across social media platforms.
Ola founder Bhavish Aggarwal fired back at Kamra, suggesting the comedian should "sit quiet and let us focus on fixing the issues." Aggarwal emphasized that Ola is rapidly expanding its service network to address customer concerns.
The Bengaluru-based company, which currently commands 27% of India's booming electric scooter market, remained silent when approached for comments regarding Monday's stock plunge and ongoing service controversies.
Since its blockbuster market debut in August, Ola Electric shares have nosedived 43% from their peak value. The decline comes amid mounting social media criticism about after-sales support and shrinking market share - which has now declined consecutively for five months due to intensifying competition and persistent service complaints.
"Social media backlash undoubtedly impacts corporate reputation," noted Kranthi Bathini, equity strategy director at Wealthmills Securities. "This latest public spat will likely affect investor confidence in the short to medium term."
A recent HSBC analyst report added fuel to concerns after visits to multiple Ola service centers revealed most locations were "overwhelmed by service requests" while struggling with quality control issues and maintaining "huge backlogs" of pending repairs.
In response to these findings, Aggarwal announced plans last month to double OLA's service center count by December - expanding from current 500 locations nationwide.
A Reuters investigation last year uncovered similar challenges across 35 different OLA facilities spanning ten Indian states. Many locations reportedly struggled with severe repair backlogs caused by workforce shortages or insufficient spare parts inventory.
The situation turned alarming at one center where over hundred scooters sat waiting for repairs - many visibly neglected under layers of bird droppings.
Tensions escalated further last month when police arrested a disgruntled customer who allegedly torched an OLA showroom in southern India protesting unsatisfactory vehicle servicing.
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