
This case study is designed for top B-school students globally, entrepreneurs, and professionals keen on learning from real-world business challenges. It uses structured insights, data points, and unique perspectives to ensure it’s engaging and valuable for even senior professionals.
. Introduction
- Company Overview: Ola Electric, a subsidiary of the Ola Group, launched its electric scooters, Ola S1 and Ola S1 Pro, in 2021, with ambitious goals of leading India’s EV (electric vehicle) revolution.
- Initial Hype: Within a month of launch, Ola received over 500,000 bookings, leveraging data from Ola’s ride-hailing platform.
- Downturn: By September 2024, market share dropped to 27% from 52% in just six months. Complaints skyrocketed to 80,000 monthly, and regulatory scrutiny intensified.

Business Lessons Categorized
1. Product Development & R&D
Problem:
- Ola acquired a Dutch company, Etergo, and launched pre-developed scooters in India without significant customization for Indian road conditions, temperature, and user needs.
- Lack of iterative testing led to frequent product failures, such as overheating batteries and non-responsive touchscreens.
Key Lessons:
- Localization: Products must be customized for specific market conditions (e.g., tropical climates in India).
- Robust Testing: Long-term testing before mass production is essential.
- Balancing Innovation & Functionality: While futuristic features like touchpad locks attract attention, functionality should remain the core focus.
Impact:
The failure to address local needs led to technical issues, dissatisfied customers, and tarnished brand credibility.

Operations & Supply Chain
Problem:
- Insufficient service centers: Ola Electric had only 500 service centers, far below what was needed to support the rapid increase in sales.
- Dependency on centralized services led to delays in addressing complaints, often taking months.
Key Lessons:
- Scalable Infrastructure: Operations must grow proportionally with sales.
- Decentralized Support: A robust dealership and service network can offload operational burdens.
- Proactive Crisis Management: Avoid backlog accumulation by forecasting service demands.
Impact:
The overwhelmed service network tarnished customer trust, especially among middle-class buyers for whom scooters are a daily necessity.
Marketing and Brand Management
Problem:
- The initial marketing campaign overpromised, leading to inflated expectations.
- The company underestimated the power of social media backlash, as complaints and incidents (like scooters catching fire) went viral.
Key Lessons:
- Transparent Messaging: Avoid creating unrealistic expectations in promotional content.
- Crisis Communication: An empathetic response to customer grievances can prevent trust erosion.
- Social Media Monitoring: Proactively address issues before they escalate publicly.
Impact:
Social media controversies reduced trust, causing a sharp decline in customer interest and market share.

Employee Retention and Corporate Culture
Problem:
- A high attrition rate of 48% among employees, with an average tenure of just 11 months.
- Complaints of unrealistic goals, intense pressure, and lack of ownership within teams.
Key Lessons:
- Stable Leadership: Consistent teams ensure smoother execution of long-term plans.
- Realistic Goals: Grounded targets create a healthier work environment and better execution.
- Employee Advocacy: Treat employees as brand ambassadors to prevent negative sentiment leakage.
Impact:
Constant churn in leadership and technical teams disrupted strategic alignment and execution.
Financial Management & Investor Trust
Problem:
- Overreliance on a single product portfolio (S1 and S1 Pro) made revenue streams vulnerable to product-specific issues.
- Regulatory scrutiny raised concerns about potential subsidy withdrawals.
Key Lessons:
- Portfolio Diversification: Multiple product lines act as financial buffers.
- Regulatory Compliance: Anticipate and mitigate regulatory risks proactively.
- Sustainable Growth: Avoid overly aggressive expansion that strains resources.
Impact:
Investor confidence eroded, leading to declining stock performance. Market capitalization took a hit, further straining cash flows.
Competitive Landscape
Problem:
- Established players like TVS and Bajaj, leveraging their dealer and service networks, quickly gained market share.
- Ola failed to maintain its first-mover advantage due to poor execution.
Key Lessons:
- Continuous Innovation: Constant improvement is required to stay ahead in a competitive market.
- Strategic Partnerships: Collaboration with dealers or partners can enhance market penetration.
- Monitoring Competition: Understand competitor strategies and address gaps promptly.
Impact:
TVS grew its market share to 21%, while Bajaj captured 20%, posing serious threats to Ola’s leadership position.

Data Highlights
- Market Share Decline: 52% in March 2024 → 27% in September 2024.
- Complaints: 80,000 monthly customer complaints by September 2024.
- Attrition Rate: 48% employee churn rate, with an average tenure of 11 months.
- Regulatory Scrutiny: Three agencies investigating Ola for consumer grievances and product safety.
Recommendations
For Ola Electric
- Focus on Core Competencies: Pause aggressive expansion to resolve product and service issues.
- Service Network Expansion: Build a decentralized network of service partners to reduce pressure on centralized operations.
- Regain Trust: Launch a “Customer First” campaign with extended warranties and quicker complaint resolution.
- Diversify Portfolio: Introduce affordable and premium options to cater to a broader audience.
For Customers
- Wait for product updates before purchasing Ola scooters.
- Opt for established brands like TVS or Bajaj if reliability is a priority.
For Investors
- Exercise caution while investing until operational and service issues are resolved.
- Monitor regulatory outcomes and competitor performance before making decisions.
Conclusion
The downfall of Ola Electric offers a cautionary tale of rapid expansion without addressing foundational business requirements. By failing to prioritize R&D, after-sales service, and employee stability, Ola Electric risks losing its market leadership to competitors. However, with proactive measures and strategic recalibration, there remains hope for a turnaround.
Reference
- Video: “The Downfall of Ola Electric | Detailed Case Study | CA Rahul Malodia”
Link: YouTube Video
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