In February 2025, Ola Electric Mobility Ltd, one of the leading electric two-wheeler companies in India, witnessed its monthly vehicle registrations slump to a three-year low of 8,000-plus, from 24,376 units the previous month. Subsequently, on March 3, 2025, Ola Electric’s share prices plummeted to Rs. 56.94 per share from its peak of Rs.146.38 in August 2024. Once considered the Tesla of India’s two-wheeler market, Ola Electric found itself deep in trouble due to dipping sales, compliance issues, mounting losses, mass layoffs, shrinking market share amidst intensifying competition, rising employee turnover, declining stock value, and a pile of customer complaints. As a result, the company lost its dominant position in the Indian EV two-wheeler market. Bhavish Aggarwal founder and CEO of Ola Electric faced the daunting task of resolving the company’s operational and financial issues and regain its lost position in the Indian EV two-wheeler market.
The background
In 2010, Aggarwal co-founded Ola Cabs, a ride-hailing service that revolutionised urban mobility and became India’s leading ride-hailing app. Following the success of Ola Cabs, Aggarwal decided to enter the two-wheeler electric vehicles (EV) space with Ola Electric. Established in 2017, Ola Electric marked Aggarwal’s ambitious leap into building a strong foundation for urban mobility and championing sustainable transportation in India. The launch of Ola S1, Ola Electric’s flagship scooter, in 2021, was a testament to the company’s powers of innovation, expertise in design, engineering prowess, and massively growing manufacturing capabilities. By May 2024, Ola Electric had emerged as a leader in the Indian electric two-wheeler space with a market share of 49%. Between 2022 and 2024, it had sold 800,000-plus electric two wheelers, about a third of all electric two-wheeler sales in India. The company generated revenue ofRs. 50.09 billion in fiscal 2024.
The downfall
The meteoric rise of Ola Electric was, however, punctuated by some major setbacks. Reportedly, from 2022, several customers had reported quality and safety issues due to fires in Ola Electric’s two-wheelers. The fires were said to have been caused by the faulty battery management system in the vehicles. About 1,400 SI Pro electric two-wheelers were then recalled by the company. But the complaints continued to escalate. Between September 2023 and August 2024, about 10,644 complaints were filed by customers. The complaints related to handlebars locking up, software issues in the mobile app, late deliveries, manufacturing defects, and unfulfilled service promises.But Aggarwal dismissed the complaints saying these were just “minor” issues. However, not satisfied by the EV maker’s consumer complaint redressal practices, the Central Consumer Protection Authority (CCPA) ordered a comprehensive enquiry into the complaints in November 2024. Following this, transport authorities across Indian states conducted raids, closed showrooms, seized vehicles, and sent show-cause notices to the company. In early 2025, India’s stock market regulator, the Securities and Exchange Board of India (SEBI), probed Ola Electric over alleged sales disclosure violations for the month of February 2025.
Ola Electric had been struggling ever since it went public in August 2024. Since its IPO, its stock had lost over 60% of its value. And growing competition only added to its woes. In December 2024, Ola Electric’s sales slumped to 13,569 units – the lowest since September 2022. In February 2025, sales fell by 50% to 8,600 units and the company lost its top spot to Bajaj Auto Ltd that sold 20,000 units during the same period. Ola Electric even lost its lead in nine out of India’s top 10 EV markets.1 Some experts believed that Ola’s aggressive expansion strategy, the fact that resources were stretched too thin, Aggarwal’s focus on building the Giga factory, and his expanding the company’s product line might all have come at a cost. Further, global supply chain disruptions had snowballed into production delays and component shortages, aggravating the company’s problems. The mounting financial losses and operational challenges began to erode investor confidence.
In a major internal restructuring during late 2024 and early 2025, 1500-plus employees were fired by the company through multiple rounds of layoffs, trimming 10% of the employee strength. While Aggarwal had earned praise for his ability to inspire and drive forward ambitious projects, his management style did come in for criticism. He faced intense scrutiny over his company’s business operations and his own management practices. Reportedly, Aggarwal micromanaged and routinely berated even his senior hires, leading to instability and employee turnover at the company.
Can Ola Electric bounce back?
In November 2024, Ola Electric launched Network Transformation and Opex Reduction Programme, a company-wide initiative to reduce cost and improve customer experience. This programme included distribution network transformation projects like shutting all regional warehouses and shipping vehicles, spare parts and accessories directly from the factory to stores, automating registration and productivity improvements in the sales and service network. Many of the company’s regional warehouses were shut down and in its place Ola Electric’s 4,000 wide retail store network was used to manage vehicle inventory, component availability, and last-mile deliveries. This initiative led to a sustainable cost reduction of Rs. 900 million per month. In addition to cost savings, the program also resulted in reducing average vehicle inventory from around 35 to 20 days, and reducing delivery time for customers from 12 days to 3-4 days. Also, 99.1 per cent of the consumer complaints the CCPA had received were resolved. The company also renegotiated contracts with vehicle registration agency partners to streamline the process and further reduce costs.
Ola Electric’s consolidated revenue from operations for Q2 FY26 ended 30th September 2025 fell 43% year-on-year to Rs 6.9 billion with total deliveries of 52,666 vehicles. Net loss narrowed to Rs 4.18 billion in the quarter compared to Rs 4.95 billion in the corresponding period of the previous year. In October 2025, with an aim to counter slowing growth, Ola Electric forayed into home Battery Energy Storage System (BESS) with the launch of Ola Shakti. Powered by the company’s in-house 4680 lithium-ion cells manufactured at the Ola Gigafactory in Tamil Nadu, Ola Shakti was expected to open new revenue streams for the EV maker. According to Shivani Singh, a financial analyst, “Ola now finds itself competing in two highly challenging markets: electric scooters – where established OEMs are increasingly executing more efficiently – and home energy storage, a segment where scale, reliability, and distribution strength outweigh brand appeal. Entering a capital-intensive business at a time of tightening cash flows further heightens operational pressure. While the home battery initiative may create an additional revenue stream, it cannot offset the company’s current challenges unless Ola strengthens its foundational EV business and exercises tighter financial discipline.”
Despite Aggarwal’s efforts to revive the ailing company, Ola Electric had been steadily ceding ground to rivals. In November 2025, TVS Motor led the EV two-wheeler market with a 25.92% market share, followed by Bajaj Auto at 21.8% and Ather at 17.43%. Ola Electric ranked fifth, behind Hero MotoCorp, as it witnessed a sharp near-50% month-on-month decline in vehicle registrations to 8,254 units in November 2025 compared to 16,013 units in the previous month. The company’s market share fell to 7.19% in November 2025 from 11.16% in October 2025.
In light of the problems it faced, the challenge before Aggarwal was how to stem the rot and reclaim Ola Electric’s market position in India’s two-wheeler EV market. Can Ola Electric course-correct and regain customer trust?
The ask
As Ola Electric is at a critical stage of business, how can Aggarwal resolve the company’s operational and financial issues and bring it back on track?
If you were Bhavish Aggarwal, Ola Electric’s CEO, what strategy would you use to re-emerge as a leading player in the Indian electric two-wheeler market?
Author:(Syeda Maseeha Qumer is Adjunct Research Faculty, IBS Case Research Centre)
Notes:
* Gross Margin = Revenue from Operations – Cost of Goods Sold
** Operating EBITDA = Gross Margin – Operating Expenses Operating Expenses = Employee Benefits Expense + Other expenses
*** EBITDA = Gross Margin – Operating Expenses + Other Income
Source: https://www.olaelectric.com/investor-relations/financials
https://inc42.com/features/is-ola-electric-bullishness-justified-after-q1s-higher-losses/
An analysis of Ola Electric’s crisis
Organisational Crisis
Organisational crisis can be defined as a short-term, undesired, and critical state in the company which endangers the further existence and growth of the company (Dubrovski 2004b; cf. Barnett and Pratt 2000; Barton 1993, 2; Buchalik 2004, 30; Fink 1986). It can lead to a drop in market share and sales and to reduced or negative profitability (Hambrick and D’Aveni, 1988).
The causes of organisational failure have been examined from two different perspectives:
The industrial organisation (IO) perspective: This locates the causes in the external environment and indicates that the company is the victim of external circumstances, and that failure does not imply management ineffectiveness or inefficiency. IO literature suggests a range of primary causes of crises such as a turbulent demand structure, economic crisis, changes in consumer tastes, and strategic competition.
Organizational studies (OS) literature places more emphasis on internal factors associated with failure (Cameron et al., 1988). According to OS literature, failure is a result of the management’s lack of vision and lack of ability to respond effectively and make the necessary adjustments to reverse the downward spiral of decline triggered by external factors.
Both IO and OS orientations have to be integrated to analyse the causes of failure in an organisation.
Established in 2017, Ola Electric transformed the electric mobility landscape in the country by making electric mobility accessible, affordable, and sustainable. However, since 2022, it had been facing major setbacks including declining sales, poor product quality, increasing consumer complaints, rising staff turnover, deteriorating stock value, and scrutiny over violations in disclosure norms. CEO Bhavish Aggarwal’s leadership also came under scrutiny as Ola Electric navigated a challenging period marked by market competition, regulatory hurdles, and public relations issues. Ola Electric’s market share plunged from over 50% in May 2024 to 28% in February 2025. As a result, the company lost its coveted position in the Indian EV two -wheeler market.
Following are some of the factors that led to the crisis at Ola Electric:
Internal Factors:
1) Product quality and safety issues like fire erupting in the electric two-wheelers sold by Ola Electric were reported
2) Complaints regarding handlebars locking up, software issues in its mobile app, late deliveries, false advertising, manufacturing defects, production delays, and unfulfilled service promises started increasing multifold. A total of 10,644 complaints were reported between September 2023 and August 2024
3) No major changes were incorporated in the EV model bought from Etergo, a Dutch start-up that Ola Electric acquired in 2020.
4) Declining sales
5) Rapid expansion led to operational issues
6) Public image was deteriorating due to product quality issues and poor service
7) Limited service network
8) Mismanagement and late payments to suppliers and logistic partners, leading to delayed deliveries
9) Increasing net losses
10) Declining stock prices
11) Rising employee turnover
12) ‘Hostile’ workplace culture
13) Mass layoffs
14) Non-compliance issues. Not complying with the laws with regard to disclosure of details. In February 2025, inflated sales data was reported.
15) Aggarwal’s micromanaging and berating employees
16) Aggarwal’s leadership style at Ola Electric has been described as both ambitious and demanding, with some viewing it as a form of micromanagement.
17) Workplace culture issues due to alleged instances of criticism and pressure to meet unrealistic deadlines
External Factors
1) Growing competitors’ strength
2) Established two wheeler manufacturers entering the EV space, such as Bajaj Auto and TVS Motor
3) Regulatory scrutiny by the Government over lapses in disclosure norms
4) Fall in demand due to slowing global economy
Ola Electric’s success in the electric two-wheeler segment was mainly powered by the ambition of Aggarwal, who pioneered India’s electric revolution. He dreamt of making India a hub for manufacturing quality EVs and of building a robust EV supply chain ecosystem. However, Ola Electric’s growth journey was punctuated by complaints about his leadership style, micromanagement, and public reactions to customer complaints. His lack of accountability and responsibility over the consumer complaints and blunt response to the government’s scrutiny over alleged violations and wrongful disclosures resulted in tarnishing both his own image and that of the startup and also causing several financial issues.
Although the way Aggarwal treated consumer feedback for Ola Electric’s two-wheelers was a contributing factor to the crisis at the company, there were other issues as well. Rapid expansion of stores, inefficient and delayed services at service centres, production delays, and component shortages at manufacturing facilities usually lead to operational and quality issues, and these were visible at Ola Electric. To some extent the crisis faced by the EV maker can be attributed to Aggarwal and his team’s mismanagement, but there were other major issues external to the company such as competitors picking up in strength and the economy slowing down.
In case of a crisis situation as in the case of Ola Electric, a big bang approach to change might be required. In terms of the extent of change, the question is whether change can occur within the existing culture as a realignment of strategy or whether transformational change is required
Combining these two axes suggests four types of strategic change are observed:
Adaptation is change that can be accommodated within the current culture and occurs incrementally. It is the most common form of change in organisations.
Reconstruction is change that may be rapid and involve a good deal of upheaval in an organisation, but does not fundamentally change the culture. It could be a turnaround situation where there is need for major structural changes or a major cost-cutting programme to deal with a decline in financial performance or difficult or changing market conditions.
Revolution is a change that requires rapid and major strategic and also culture change.
Evolution is a change in strategy that requires culture change, but over time.
Aggarwal can adopt a Reconstruction Strategy to overcome the crisis at Ola Electric.
In the reconstruction strategy, the emphasis is on rapid rebuilding, in the absence of which the business could face closure, enter terminal decline, or be taken over. This is commonly referred to as a turnaround strategy, where the emphasis is on speed of change and rapid cost reduction and/or revenue generation, and managers need to prioritise areas that show quick and significant improvements.
Some of the main elements of Aggarwal’s reconstruction strategy should be:
Crisis stabilisation: This requires a short-term focus on cost reduction and/or revenue increase. The most successful turnaround strategies also focus on reducing direct operational costs and on productivity gains.
1) Aggarwal should streamline and optimize the company’s expenses to reduce costs
2) He should streamline production processes
3) He should review the pricing strategy
4) Consumer complaints should be immediately addressed by creating a complaint redressal team of experts with customer service executives and a technical team to resolve issues
5) Aggarwal must scale up the process of building the Future factory and Super factory that are expected to start production in 2026
6) To generate growth and demand, Aggarwal should expand Ola’s retail, service, and vehicle charging operations and service centers
7)He should set targets for opening service centres every year to facilitate after-sales service for customers
8)He should evaluate the service received by customers through their feedback and take corrective steps to enhance service center offerings
Management changes: Changes in management may be required, especially at the top.
1) Manufacturing, product quality, and operating issues continue to plague Ola Electric as of 2025 and it needs to bring in an experienced manufacturing executive to come up with a long-term plan to rectify production inefficiencies
2) Aggarwal should come out with a succession plan along with well-crafted team development, goal setting, communication, and performance management processes
3) To compete, Ola Electric would require an impressive degree of leadership, accountability, corporate responsibility, innovation, creativity, brand strategy. and teamwork
4) Aggarwal should focus on increasing productivity through localised manufacturing of the components and spare parts used in making the electric scooters
5) He should ramp up the construction of the Giga factory
6) He should focus on achieving supply chain efficiency by introducing advanced processes such as lean manufacturing, just-in-time (JIT), and digital tracking to streamline supply chain operations
7) Aggarwal should rebuild trust and the company’s image through financial transparency, accountability, and authenticity of his media statements.
8) He should strengthen after sales service by leveraging advanced technology and investing in training of the support staff and infrastructure, and develop strategies for battery maintenance and replacement, including options for swapping or charging.
Gaining stakeholder support. In a turnaround situation, it is vital that key stakeholders are kept clearly informed of the situation and improvements as they are being made. Since the expectations of stakeholder groups will differ, it is normal for conflicts to exist regarding the importance or desirability of many aspects of strategy. In most situations, a compromise will need to be reached.
1) Ola Electric, a public company, came out with India’s biggest IPO launch in August 2024, raising US$734 million and valuing the startup at US$4.8 billion. Ola Electric’s stakeholders – shareholders, investors, employees, business partners, suppliers, and customers – were facing various issues. While the shareholders and investors were worried about the declining stock prices, employees lamented about the toxic work culture; business partners and suppliers complained that they had not received payments on time, and ended their contracts with the company; and customers were frustrated by the product quality, service delays, and late deliveries. Aggarwal has to own responsibility and try to address the issues affecting each stakeholder.
2) Ola Electric has to adopt a constructive communication strategy to rebuild the company’s brand image.
3) Aggarwal should learn how to be transparent with the government authorities when it comes to mandatory disclosures. He should instruct his team to comply with the enquiries ordered by the various state agencies. He should also abide by the mandate given by these state bodies to gain stakeholder support.
Clarifying the target market(s). Central to turnaround success is ensuring clarity on the target market or market segments most likely to generate cash and grow profits.
1) Ola Electric’s two-wheelers were targeted at middle income level consumers in India who could not afford a four wheeler and at the same time were concerned about environmental impact due to fossil fuel vehicles. To ensure that its target market is satisfied, Aggarwal and his team have to take meticulous note of consumer feedback. He and his team have to solve their problems, especially as this is by far the largest growing consumer segment in India which could turn into a fertile ground for the company to expand and sustain itself over the long run.
Refocusing. Clarifying the target market also provides the company the opportunity to discontinue or outsource products and services that are not targeted at those markets, that are eating up management time for little return, or that are not making a sufficient financial contribution.
1) Ola Electric has to revisit its core values and structure its strategies accordingly
2) It has to reposition itself to appeal to the masses by focusing on consumer safety
3) It should speed up the construction of manufacturing hubs to further improve production capacity and capability.
Financial restructuring. The financial structure of the organisation may need to be changed. This typically involves changing the existing capital structure and raising additional finance.
1) The company must raise capital through both debt and equity issuances
2) It should cut down on any avoidable costs and create a Financial Management Plan to reduce the net losses the company had been incurring
Prioritisation of critical improvement areas: This requires the ability in managers to prioritise things that give significant returns.
Aggarwal should
1) Enhance production capacity
2) Stick to the core aim of making India the global EV hub of the world
3) Keep the operational focus on meeting long-term goals
4) Create a global integrated marketing plan of building a strong and consistent brand image
Ola Electric’s path to reviving sales, continued growth, and eventual profitability depends on the company’s ability to expand its product portfolio with enhanced customer safety features and service, complete its Future factory and Giga factory, and overcome financial hurdles. The year 2026 could mark a critical turning point for Ola Electric and for its founder and CEO Aggarwal.
(The case author, Syeda Maseeha Qumer, is Adjunct Research Faculty, IBS Case Research Centre)
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Published on January 25, 2026
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