Ola Electric lays off workers, cuts in expenses will save Rs 90 crore per month
Ola Electric, one of the largest electric two-wheeler companies, has started saving about Rs 90 crore per month by laying off workers, reducing service and warranty expenses and changing the network. In the last few months, the company has faced difficulties due to customer complaints regarding service.
Vishal Chaturvedi, Business Head of Ola Electric, told NDTV Profit that the cost reduction will save the company about Rs 90 crore per month. Earlier, the company had said that it has successfully implemented its plan to change its network and reduce operational expenditure. Ola Electric said that some part of this saving can be seen in this quarter. Chaturvedi said that about 4,000 stores of the company contribute to the sales.
It is also the first electric two-wheeler maker to get subsidy under the Production-Linked Incentive (PLI) scheme of the Central Government. This scheme was launched to promote localization of automotive technology in the country. Recently, Ola Electric had told the stock exchange in a filing that its subsidiary Ola Electric Technologies has received a subsidy of Rs 73.74 crore from the Ministry of Heavy Industries under the PLI scheme of automobiles and auto components. The duration of this scheme is five years and a budgetary allocation of Rs 25,938 crore was made for it. Earlier, big automobile companies Tata Motors and Mahindra & Mahindra had received subsidy under this scheme.
To cut costs, Ola Electric has prepared to process the registration of vehicles itself. Earlier, the company had outsourced the process of registration of vehicles. The company has formed a team to process the registration of vehicles. Ola Electric estimates that this will reduce the cost to about 20 percent. Rs 1,500-1,800 is paid to vendor Rosmerta for the registration of an electric vehicle of the company. Ola Electric estimates that this cost will come down to around Rs 300. The delivery of the company’s electric motorcycle can be started soon.
