(Reuters) -India’s top electric two-wheeler maker Ola Electric reported a wider quarterly loss on Friday, hurt by heavy discounts it offered to fend off rising competition and as it spent on improving the quality of service at its workshops.
The SoftBank-backed firm reported a loss of 5.64 billion rupees ($64.51 million) in the October-to-December quarter, compared with a loss of 3.76 billion rupees a year earlier.
Its shares dropped 4% after the results.
The company, which is under regulatory scrutiny for lapses in quality of service at its workshops, incurred a one-time cost of 1.1 billion rupees to address the issue.
The company also spent 130 million rupees as it slashed jobs during the quarter.
Ola Electric is the top seller of electric two-wheelers in India by number of vehicles sold, but its lead over legacy rivals such as Bajaj Auto and TVS Motor has narrowed as they launch newer models priced near Ola’s scooters.
Ola Electric launched its first scooter in late 2021 but is yet to turn a profit. It hopes that manufacturing battery cells should help it achieve that.
During the December quarter, which coincides with festivals in India, Ola Electric offered customers hefty discounts on entry-level scooters, effectively slashing their showroom price by half to as low as 50,000 rupees.
That, analysts said, dragged revenue down 19.4% to 10.45 billion rupees.
“October saw strong performance fueled by festival sales, however the overall quarter was weak due to high competitive intensity and service challenges,” the company said.
Ola Electric’s entry-level models made up one-third of its volumes, higher than a mere 4% a year before.
Its total expenses dropped, with raw material costs – including cells – declining about 29%.
($1 = 87.4300 Indian rupees)
(Reporting by Nandan Mandayam and Meenakshi Maidas in Bengaluru; Editing by Mrigank Dhaniwala)
