Clearly, some of the bullishness of the early days has gone missing.
Ola's market share is slipping amid rising competition from incumbents like Bajaj Auto and TVS.
In 2021, Bhavish Aggarwal stood on a dusty plot in the Krishnagiri district of Tamil Nadu, and promised to build the world's largest electric two-wheeler factory.
Within eight months -- and despite the challenges posed by the COVID-19 pandemic -- that vision became the Ola Futurefactory.
The facility, staffed entirely by women and run mainly by robots, aims to have an annual production capacity of 10 million units in future.
Backed by SoftBank, Ola Electric quickly became the market leader.
Soon after, it made a blockbuster market debut in 2024, its IPO valuing the firm at $4.8 billion.
Cut to 2025. Bengaluru-based Ola Electric's losses more than doubled in the quarter ended March as vehicle deliveries fell sharply and revenue declined.
The company posted a net loss of Rs 870 crore in the fourth quarter ended March 2025.
The revenue from operations tumbled 62 per cent year-on-year (Y-o-Y) to Rs 611 crore during the quarter under review.
Vehicle shipments during the quarter fell to 51,375 units, down from 115,000 a year ago.
Clearly, some of the bullishness of the early days has gone missing. Ola's market share is slipping amid rising competition from incumbents like Bajaj Auto and TVS.
Customers are voicing concerns regarding product quality and regulators are watching. Recent exits by Hyundai and Kia have raised fresh doubts.
The challenge for Aggarwal -- once hailed as India's Elon Musk -- is whether his bold vision is enough to weather the storm.
"When Ola Electric came in, they had a free run," said an industry executive. "This is the first time they're facing a real slump."
And, analysts are wary. "Ola Electric launched the bike, they stuffed the market with inventory, and they had an initial brand following which led to good sales," said Vinit Bolinjkar, head of research at Ventura Securities.
However, this early momentum has proven unsustainable as numbers have seen a significant drop despite establishing 4,000 distributor outlets.
Unlike services, Ola's foray into product manufacturing comes with a different set of expectations.
The company's post-sales experience has drawn criticism, contributing to customer dissatisfaction.
Early this year, Ola Electric received a third communication from the Central Consumer Protection Authority (CCPA), seeking additional information related to an investigation into over 10,000 consumer complaints regarding its electric two-wheelers.
"Ola doesn't solve the problem -- it just keeps issuing tickets. For a year now, I've received over a 100 tickets for the same issue,'' said a customer on social media, where such complaints are widespread.
On his part, Aggarwal, founder of Ola Electric, said in the company's earnings call on May 29: "As we have transitioned from a private to a public company, we must also manage operating risk in a slightly more mature way."
He added: ''Going forward, you will see us be deeper as well as thoughtful about capital allocation and operating risk."
According to government Vahan portal data, Ola Electric's market share declined to approximately 18-20 per cent in May 2025, from 22.1 per cent in April 2025 and a significant drop from 49.2 per cent in May 2024.
This pushed Ola Electric to third position behind TVS Motor (24 per cent) and Bajaj Auto (22 per cent), which have expanded their market presence.
Another rival, Ather Energy, which went public last month, is rapidly gaining ground and has secured a 13 per cent share of the market.
During the earnings call, Aggarwal acknowledged recent setbacks including decrease in market share but expressed confidence in the company's long-term strategic position.
He also signaled a shift in market dynamics, suggesting that the EV scooter segment is now entering a more rational and innovation-led phase.
"The next phase for our company is to really build a Roadster franchise," he said.
Incumbents strike back
In the midst of Ola Electric's rollercoaster journey, how have established players like TVS and Bajaj managed to scale up in the two-wheeler segment?
Kumar Rakesh, analyst (information technology and auto) at BNP Paribas explains that India's electric two-wheeler market is entering a new phase of maturity -- one where early enthusiasm must give way to durable business models.
Once dominated by tech-savvy early adopters and fueled by government incentives, the industry now faces a pivotal test: winning over the mass-market buyer and doing so profitably.
Rakesh describes the initial surge in electric two-wheeler adoption as a function of two distinct strategies: offering highly differentiated, tech-forward products or aggressively lowering prices to capture volume.
Startups like Ola Electric largely pursued the former route, gaining traction among consumers looking for novelty factor, who are searching for a product which is very differentiated compared to most others in the market.
This worked up to a point -- penetration hit the 5-7 per cent range -- but the game changed beyond that threshold.
"If you want to expand the market beyond that, you would need the early mass market to start adopting," he says.
Unlike early adopters, these customers are influenced less by technology and more by resale value, service availability, and word-of-mouth reputation.
Legacy players like TVS and Bajaj are gaining ground by leveraging exactly those traditional strengths.
Their products offer what mass-market buyers prioritise: reliability, servicing convenience, and brand trust.
"Their product was not the most advanced initially in terms of technology offering... but they have the reliability and the relatively stronger word of mouth," Rakesh says, noting that both firms have also expanded their distribution networks and adjusted prices to remain competitive.
That combination has begun to erode the early market share of startups like Ola Electric, raising questions about the sustainability of their initial lead.
According to Srihari Mulgund, partner and new-age mobility leader at EY-Parthenon, the playing field is tilting back in favor of traditional OEMs, driven by their institutional strengths, deep supply chains, and robust distribution networks.
The transition to EVs initially disrupted the established automotive framework, but that disadvantage was largely temporary.
Over the last five years... everybody within OEMs (original equipment manufacturers) has become more educated about how to build a product, according to Mulgund.
Supply chains have evolved, and domestic suppliers have risen to the occasion.
"So that gap also has been bridged," he points out.
As a result, legacy players are now on solid footing.
"Any supplier worth his salt would want to work with an established OEM who can give him millions of units in contract," Mulgund explains.
"And distribution and branding was never an issue."
Public market investors are now taking a more measured view of EV startups, especially those struggling to maintain share or stem losses after going public.
Some analysts summed up investor sentiment related to Ola Electric in two words: "Cautiously optimistic."
Ola Electric has faced additional challenges following the exit of two early backers.
Hyundai Motor has fully divested its stake in the EV maker, while Kia has trimmed its holding.
The combined stake sales brought in around $80 million.
The two South Korean automakers had jointly invested $300 million in Ola Electric in 2019, aiming to collaborate on electric vehicle development and charging infrastructure alongside the company.
Experts believe that investor sentiment has shifted in favour of incumbents, with some now trading at higher valuation multiples as investors gain confidence in their ability to compete.
"Two years back, there were concerns that incumbents may not be able to compete well enough," an analyst said. Now, that view is changing.
As for the moment captured in Krishnagiri back in 2021, it looks like a faraway dream now.
Feature Presentation: Aslam Hunani/Rediff.com
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