Ola Electric suffers a major setback, 90 percent of showrooms to be closed in Maharashtra!
Difficulties are increasing for Ola Electric, one of the largest electric two-wheeler companies. About 90 percent of the company’s showrooms will be closed in Maharashtra. The reason for this is that the company does not have a permit for these showrooms. Ola Electric has about 450 stores in Maharashtra and about 90 percent of them may be closed.
A media report has stated that the state government has decided to close most of the company’s showrooms in Maharashtra as they do not have a trade certificate. Under the Central Motor Vehicles Act and Rule 33 of the Central Motor Vehicles, manufacturers and distributors of vehicles have to obtain a business certificate for registration of vehicles. The closure of a large number of showrooms in Maharashtra may lead to a huge drop in Ola Electric’s sales. Maharashtra has a large share in the sales of electric two-wheelers. In the first quarter of the current financial year, Ola Electric’s market share has come down to 19.6 percent. It was around 33.4 percent in the same period of the previous financial year.
Competition increased for the company
Last month, Ola Electric sold 20,190 units. This is a decrease of more than 45 percent on a year-on-year basis. According to data from the Federation of Automobile Dealers Association (FADA), the company’s monthly sales have increased by 9.13 percent. In May, the company sold 18,501 units. Recently, Ola Electric started delivering its first electric motorcycle Roadster X to customers after a delay of a few months.
Ola Electric is facing tough competition from Bajaj Auto and TVS Motor in the electric two-wheeler market. Sales of affordable priced electric scooters of Bajaj Auto and TVS Motor have increased. Since launching the Initial Public Offer (IPO) in August last year, Ola Electric has been facing challenges such as declining sales, increasing regulatory pressure and tough competition from other electric two-wheeler companies. Recently, the company had said that it is considering taking a loan of about Rs 1,700 crore to repay the existing debt. The company’s share price has also fallen drastically.
