Ola cuts price of its cheapest e-scooter to boost bookings

In an aggressive move to boost market share and strengthen its financial footing ahead of its initial public offering (IPO), Ola Electric has substantially reduced the price of its new S1X scooter, powered by a 2kWh battery, which it had announced in February.

The price cut of ₹10,000, a 12.5% reduction from the original ₹80,000, brings the ex-showroom cost down to ₹70,000. The company said it will begin deliveries of the scooter in a phased manner, starting next week.

This variant of the Ola S1X with the small 2kWh battery, its cheapest offering, was delayed as the company prioritized delivering its larger counterparts first. The pricing adjustment is aimed at increasing the affordability of Ola's electric scooters as it intensifies efforts to consolidate its leadership in India's highly-competitive e-two-wheeler market, even as sales of the scooters are likely to drop following a government decision to reduce demand incentives on the vehicles, beginning this month.

As the Bhavish Aggarwal-led company prepares for a landmark IPO—the first in India's electric vehicle space—it is also nearing the final stages of securing commitments from major investors. Mint had reported that Singapore-based Eastspring and UK-based Pictet are among those interested in becoming anchor investors. Ola Electric's pitch includes its advanced battery technology, notably the '4680' form factor batteries, which promise longer ranges and faster charging times.

Market analysts point out that while the EV industry is poised for significant growth, its path to profitability remains challenging. The timely fundraise through the IPO is viewed as crucial for Ola to maintain its competitive edge and capital structure, especially as traditional automakers also increase their presence in the EV sector. Its rival Ather Energy has also launched a new scooter, Rizta, in the family scooter segment, at a starting price of ₹1.10 lakh, ex-showroom. Ola Electric plans to raise ₹5,500 crore by selling new shares, seeking a valuation of around $6 billion, a notable increase from its last valuation of $5.4 billion in October. The public offering will include a sale of up to 47.4 million shares by founder Aggarwal, with only 10% of the IPO reserved for retail investors.

The price cut of ₹10,000, a 12.5% reduction, brings the ex-showroom cost of the new S1X scooter down to ₹70,000