During the festive season, discounts boosted Ola Electric's daily sales average Company news

Buyers of other versions of the S1 also enjoy a discount of up to Rs 25,000, while those eyeing the flagship S1 Pro can receive an exchange bonus of Rs 5,000. Ola Boss' sales are already under regulatory scrutiny as the Automotive Research Association of India (ARAI) has raised concerns over the company's recent pricing practices, this newspaper recently reported.

In an October 8 correspondence to the Bhavish Aggarwal-led company, ARAI Boss did not inform Ola about the price cut of its S1 X 2 kWh model before the sale began. This oversight may affect the model's eligibility for government subsidies under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme.

By pricing its e2W below Rs 50,000, Ola Electric has offered a 33 percent discount as opposed to a 5-10 percent discount offered by its competitors. Experts warn that these aggressive pricing strategies can come at a cost to profitability.

“Getting a vehicle under Rs 50,000 is a bargain,” says Pritesh Singh, CASE and reciprocating engine expert at NRI Consulting & Solutions.

“Sales growth is expected as consumers will not opt ​​for products that cost more than Rs 100,000 when they can purchase one at half the price. However, this increase is only a temporary solution; Such steep discounts are unsustainable and could threaten long-term profitability,” added Singh. Ola Electric did not respond to Business Standard's queries on the number of vehicles sold at a discount, the impact of these sales on its profits and other related details.

Among the four major players in the e2W market, Ola Electric leads with the lowest starting price of ₹74,999, even before applying any discount. The Bajaj Chetak price starts at Rs 100,000 while the TVS Motor starts at around ₹ 1,07,000. The fourth player, Athar Energy, leads the pack with a starting price of ₹1,10,000. These four players captured 85% of the total 51,079 e2Ws sold in the first 15 days of October.

This pricing strategy positions Ola Electric as a strong competitor, making it a tough sell in the competitive landscape, market observers said.

“Ola’s boss discount was implemented strategically to protect its market share amid increased competition, customer complaints and increased regulatory scrutiny. However, the company benefits from government incentive schemes, particularly the Production Linked Incentive (PLI) scheme, which can help ease some of its financial burden,” said Punit Gupta, Director, S&P Global Mobility.

Singh, however, said excessive discounting by industry players could push profits further into the future, delaying returns. This challenge is compounded as the cost of critical components such as batteries rises – an increase that appears inevitable in the coming years.

The company reported a net loss of ₹1,584.4 million in FY24, compared to a loss of ₹1,472.1 million in the previous year. In the April-June quarter, its net loss was ₹347 million, up from ₹267 million in the same period last year.