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Saturday, February 24, 2024

Ola Lowers Sales Goal for 2023–25 Before Launching $700 Million IPO: Report

<p>As a result of decreased government subsidies driving up e-scooter pricing, Ola Electric, an Indian firm, has dropped its sales targets for 2023–2025 by more than half and postponed its ambition of turning a profit by a year, per a document and two persons with direct knowledge of the company’s finances.</p>
<p><img decoding=”async” class=”alignnone wp-image-298081″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-ola-lowers-sales-goal-for-202325-before-launching-700-million-ipo-report-download-.jpg” alt=”theindiaprint.com ola lowers sales goal for 202325 before launching 700 million ipo report download” width=”1122″ height=”837″ title=”Ola Lowers Sales Goal for 2023–25 Before Launching $700 Million IPO: Report 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-ola-lowers-sales-goal-for-202325-before-launching-700-million-ipo-report-download-.jpg 260w, https://www.theindiaprint.com/wp-content/uploads/2023/12/theindiaprint.com-ola-lowers-sales-goal-for-202325-before-launching-700-million-ipo-report-download–150×112.jpg 150w” sizes=”(max-width: 1122px) 100vw, 1122px” /></p>
<p>Ola, a SoftBank-backed firm that compares itself to Tesla in the West, has lowered its ambitions ahead of its $700 million stock market launch plan, despite the fact that it still leads the tiny but rapidly expanding e-scooter industry.</p>
<p>India’s government abruptly removed the monetary incentives for e-scooter purchases in May without providing a reason. At the time, Bhavish Aggarwal, CEO of Ola, predicted that the lower incentive would only cause a “short-term blip” in sales, adding that it would “have no impact on volumes”.</p>
<p>As per the latest financial predictions reviewed by Reuters, Ola anticipates selling 300,000 e-scooters in the current fiscal year ending in March 2024, a decrease of two-thirds.</p>
<p>According to the internal document, the revenue target for the current fiscal year period is $591 million, down from the previous goal of $1.55 billion, or roughly 60%.</p>
<p>Ola declined to comment on the paper or the reductions to internal expectations in a statement. Future financial goals, it said, were “yet to be verified”. “This is completely confidential information of the company,” stated Ola.</p>
<p>Two people with firsthand knowledge of the company’s finances indicated that the objectives had been decreased as a result of the government’s reduced support. They asked not to be identified.</p>
<p>“The new numbers have been toned down so the company is able to meet or exceed them … that is what investors want to see,” according to a source.</p>
<p>While Ola is introducing new scooters, Reuters reports that some of its statewide network of more than 400 service centers, which maintain and repair its electric vehicles, are beginning to feel the burden of increased sales.</p>
<p>With Ola leading the market, sales of e-scooters in India almost quadrupled to over 700,000 in 2022–2023 compared to the previous year, although they were still a small portion of the country’s 15 million+ two-wheeler sales.</p>
<p>By 2030, the goal of Prime Minister Narendra Modi is for 70% of new two-wheeler sales to be electric. India now provides incentives for e-scooters equal to 15% of the price before tax, as opposed to</p>
<p>with 40% sooner, resulting in increased costs.</p>
<p>Prior to the reduction in government incentives, Ola, which was still losing money, had anticipated turning a $220 million operational profit in the current fiscal year 2023–2024. According to the updated goals in the paper, it will turn a $92 million operational loss this year and a $111 million profit the next year.</p>
<p>Sales will increase as well, albeit much more slowly than first anticipated. According to the latest paper, Ola plans to sell 2.3 million units in 2025–2026 and 900,000 units in 2024–2025. These goals are, respectively, 60% and 21% less than prior projections made with incentives.</p>
<p>Ola’s Aggarwal cut the price of his entry-level e-scooter on Saturday by roughly 20% to about $1,100 in an effort to increase its appeal and encourage more people to switch to electric vehicles. He also stated that the reduction in government incentives was not a concern.</p>
<p>“People had feared the e-scooter industry would be hit due to government incentive cuts. The industry has more than recovered,” Aggarwal said</p>

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