Ola Electric hopes to tackle after-sales crisis with help from EY

Ola Electric, recently in the news for a mounting number of customer complaints and increased scrutiny from consumer watchdogs and policymakers, has enlisted consulting firm EY (Ernst & Young) India to embark on a “service transformation” aimed at addressing growing challenges related to after-sales service.

The collaboration with EY is meant to enhance various service-related aspects, including streamlining business operations and optimising spare parts stocking and inventory management.

Reports indicate that nearly a dozen EY executives joined Ola Electric on a three-month deputation to tackle immediate challenges while establishing improved processes. The potential for extending the project duration will depend on the outcomes of these efforts.

The Economic Times quoted an insider familiar with the developments as saying, “EY is helping Ola in streamlining business processes, inventory management of spare parts, and improving an on-ground presence in places where it has sales but no service.” This move highlights the pressing issues surrounding the availability of spare parts and qualified service personnel.

Ola Electric's situation has become increasingly precarious, with customer complaints reportedly escalating to a staggering 80,000 per month. This alarming rate has drawn attention from the Central Consumer Protection Authority (CCPA), which issued a show cause notice to the company for alleged consumer rights violations, misleading advertising, and unfair trade practices.

In response to these developments, the company has been instructed to implement consumer-focused changes, including issuing refunds and providing receipts for auto rides.

Adding fuel to fire, a public social media spat last week between Ola Electric CEO Bhavish Aggarwal and comedian-activist Kunal Kamra brought further visibility to the company's ongoing struggles. Viral images of Ola Electric vehicles left idle at service centres have only compounded the scrutiny.

The CCPA’s actions sent shockwaves through the electric vehicle industry, raising critical questions about Ola Electric's commitment to customer-centricity. The troubles for the company began on 3 October 2024, when the CCPA issued its notice in response to a surge of complaints focused on service delays, repair issues, and unfulfilled promises. Between September 2023 and August 2024, approximately 10,000 complaints were registered, prompting concerns from both consumers and regulatory bodies.

In an effort to further understand the situation, the ministry of heavy industries has sought feedback from the Automotive Research Association of India (ARAI), the agency responsible for certifying electric vehicles eligible for government support.

ARAI has been tasked with monitoring how Ola Electric adheres to the guidelines of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME) and the PM E-Drive schemes, from which the company benefits significantly through subsidies for electric vehicle purchases.

The cumulative effect of these challenges has already impacted Ola Electric’s stock performance, registering a notable drop of 6 per cent on 10 October. Since peaking at Rs 157 in August, the stock has declined nearly 44 per cent, reflecting investors' growing concerns over the company's operational hurdles and the sustainability of its growth trajectory.

As Ola Electric navigates this tumultuous landscape, the effectiveness of its partnership with EY and the implementation of customer-focused strategies will be critical in restoring consumer trust and stabilising its market position.