Chip shortage delays Ola Electric scooter deliveries

Ola Electric is moving the delivery for the first batch of its electric scooters to between December 15 to the end of the month, a two- to four-week delay from its earlier schedule, due to a shortage of chipsets and electronic parts.

The first batch of deliveries were scheduled for November 30 but the company decided to delay them after a meeting between its factory team and the global supply chain on Saturday.

It became clear that the late delivery of chips and electronic parts was only ‘getting worse’, sources told Business Standard.

Ola has apologised to customers for the delay and said it is "ramping up production as fast as we can so that you can get your Ola S1 at the earliest".

It has stopped taking any new bookings until the chip shortage has eased, say sources.

The shortage has hit vehicle manufacturers across the globe.

Qualcomm has a tie-up to provide Ola Electric with the key 4G-connected octa-core android platform that provides connectivity and computing capabilities.

Qualcomm gets its chips manufactured by third party players.

Qualcomm India president Rajen Vagadia, in an interview to Business Standard late last month, had said that while his company was trying to bring about some normalisation by April 2022 for all its customers, though some industries such as automobiles might feel the pinch a little longer.

The dependence on chips in powering an electric vehicle can be gauged from the fact that industry estimates say that a two-wheeler requires about 15-20 microchips and sensors while cars need between 150-200.

“There is a problem and the situation is evolving.

"But I think we are better off than others because we had planned for the shortage so the impact is not that pronounced,” said Varun Dubey, Ola Electric chief marketing officer.

Ola started bookings from September 15 and announced it had done sales worth of Rs 600 crore on the first day, hitting Rs 1,100 crore on the second.

Earlier, in the second week of July, it had offered consumers the chance to reserve (before booking) the scooter for only Rs 499.

While test rides for customers who have booked have begun, the deliveries are still awaited.

Ola is not the only electric scooter player facing chip shortages.

Tarun Mehta, co-founder of Ather Energy, another maker of EV scooters, said recently that the delivery schedule of some chips has increased tenfold.

As a result, Mehta said, the gap between the booking of a scooter and delivery can take as long as 45-60 days, depending on the city.

“The delivery time for these (chips) was earlier 3-4 weeks; now it is 36-38 weeks.

"For growth players like us, it is a big constraint,” Mehta said.

As a result, he was able to do sales of only Rs 65 crore in November even though, based on demand, he could have touched over Rs 100-150 crore.

Mehta has said he is hopeful that the shortage will ease off by next March-April.

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