Ola Electric, once a trailblazer in Indiaās electric vehicle (EV) market, is currently navigating a series of challenges that have placed it under intense public and regulatory scrutiny. The companyās recent hurdles encompass regulatory raids, legal petitions, consumer complaints, and financial discrepancies, all of which have collectively impacted its market standing and investor confidence. In recent weeks, Ola Electricās showrooms across various Indian states, including Maharashtra and Punjab, have been subjected to raids by transport authorities. The primary allegation centers on the misuse of trade certificates, with reports indicating that over 95% of Olaās showrooms lacked the mandated certifications under the Motor Vehicles Act. This non-compliance led to the seizure of vehicles and the issuance of show-cause notices to the company. For instance, inspections in Mumbai and Pune resulted in the confiscation of 36 e-scooters due to the absence of valid trade certificates. Adding to its woes, Ola Electricās subsidiary, Ola Electric Technologies, is facing insolvency petitions from two key vendorsāRosmerta Digital Services and Rosmerta Safety Systems. These firms, responsible for vehicle registration services and high-security registration plates, allege unpaid dues amounting to approximately ā¹22 crore and ā¹2.5 crore, respectively. Ola Electric has disputed these claims and is seeking legal counsel to address the allegations.
A significant concern has arisen from discrepancies between Ola Electricās reported sales figures and actual vehicle registrations. In February, the company reported sales of 25,000 vehicles; however, only 8,600 were registered. Ola attributed this gap to a ātemporaryā backlog in registrations, citing the termination of contracts with two vendors handling the process. The government has sought clarification on this mismatch, and the Automotive Research Association of India (ARAI) has been tasked with investigating the matter to ensure compliance with the PM E-DRIVE Scheme guidelines. The company has also been under the lens due to a surge in consumer complaints. The Central Consumer Protection Authority (CCPA) issued a notice to Ola Electric following an unusually high number of grievancesātotaling around 10,000āpertaining to delayed and subpar after-sales services, as well as inaccurate invoices. In response, the Bureau of Indian Standards has been directed to conduct a thorough investigation into the companyās service standards and product quality. These compounded issues have adversely affected Ola Electricās market performance. The companyās shares have experienced a significant decline, dropping over 6% to a record low, marking a 38% decrease from its initial public offering price of ā¹76 in August 2024. The downturn reflects growing investor apprehension regarding the companyās operational challenges and regulatory compliance.
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