Ola Electric overhauls its distribution and inventory management systems

• Company on track to sell over 25,000 units within the month, underscoring its ongoing leadership in the electric vehicle segment.

Ola Electric’s decision to eliminate regional warehouses across India marks a significant transformation in its operational strategy. By leveraging its extensive network of 4,000 retail stores for maintaining vehicle inventory, spare parts, accessories, and facilitating last-mile deliveries, the company aims to enhance its efficiency and profitability.

The strategic move is anticipated to improve EBITDA margins by nearly 10 percentage points, thereby reinforcing Ola Electric’s position as a leader in the electric two-wheeler market.

The redesign of Ola Electric’s distribution network reflects a comprehensive re-evaluation of inventory management and customer service. By streamlining operations, the company is poised to achieve substantial cost savings, estimated at approximately Rs30 crore per month.

Enhancing the customer experience

The renegotiation of contracts with vehicle registration agency partners further complements this initiative, aiming to expedite the registration process while minimizing expenses.

Although this transition temporarily impacted the registration numbers on the VAHAN portal in February, Ola Electric has assured stakeholders that actual sales figures remained robust.

Internal sources indicate that the company is on track to sell over 25,000 units within the month, underscoring its ongoing leadership in the electric vehicle segment.

The front-end network redesign not only eliminates an entire distribution layer but also positions retail stores as dual-function delivery points. This innovation has halved the inventory pipeline from 30 days to 15 days and reduced delivery timelines from 10 days to a mere 4-5 days, thereby significantly enhancing the customer experience.

As Ola Electric navigates this pivotal phase, its emphasis on profitability aligns with the broader trends in India’s electric vehicle market, which has experienced double-digit growth amidst rising fuel prices and increased adoption in Tier 3 and 4 markets.

Industry experts suggest that sustainable business models will ultimately dictate the long-term success of players in this burgeoning sector.