Ola’s Biggest E-Scooter Factory Hits Roadblock Due To Global Chip Shortage

Deliveries of Ola electric scooters may be pushed back until January

Ola, which began taking orders of electric scooters in September, said deliveries would begin in October that later got delayed to November and then to December 15. Image: AFP

New Delhi: Indian ride-hailing platform Ola’s mass production of electric scooters is likely to be pushed back until at least January, according to a report by Bloomberg.

Sources, who asked not to be identified, told Bloomberg, the Bengaluru-based firm is trying to deliver rest of the orders by February. Ola Electric has already delayed initial deliveries to mid-December from October.

According to sources, Ola, which has the financial backing of SoftBank and Tiger Global, is struggling to iron out manufacturing wrinkles, as the company’s body shop is operating at half capacity, its paint shop isn’t up and running, and global chip shortage.

Analysts have pointed out that an over-reliance on imported components is causing great difficulty for Ola in rolling out e-scooters on time. It is not that Ola alone is facing the difficulty. Indian automotive industry is plagued by the global chip shortage.

Report showed that customers waiting for their e-bikes are already voicing their unhappiness. When Ola began taking orders in September, it said deliveries would begin in October, which later got delayed to November and then to December 15.

Many disgruntled customers, some of whom paid the entire Rs 99,999 upfront, have taken to social media.

Founder Bhavish Aggarwal during a Reuters Next conference earlier this month squarely put the blame on chip shortage. “The chip shortage has been an unpredictable beast for everybody.”

Anthony de Ruijter, a senior associate at UK-based global investment research firm Third Bridge Group, said,” It’s never a great look for anyone if you’ve got a consumer base that’s not happy with delivery timelines. I would expect this is going to be an issue for the sector, not just Ola Electric.”

Ruijter said, “There’s still a lot of reliance in India on the import-and-assemble model, not just within Ola’s ecosystem but among automakers in general. This in turn creates too many factors a manufacturer can’t control and often results in a product that isn’t customized for the local market.”

The ability of Ola Electric, valued at more than $5 billion in a recent fundraising round, to deliver on its promise will also rub off on its parent company ANI Technologies as it prepares to woo investors ahead of a planned initial public offering (IPO) in Mumbai next year.

Aggarwal had said earlier that Ola plans to go public in the first of 2022.