Ola Electric is facing growing regulatory risks as 95% of its shops, it has been reported, do not have the right trade certificates which are necessary according to the Motor Vehicles Act of India. The company that had rapidly expanded its network to 4,000 showrooms in 2022 has faced several raids, seizure of vehicles and show cause notices from transport departments across the country. The investigations revealed that only 100 out of the 3,400 showrooms analysed had valid trade certificates which are required for the purpose of demonstrating, trading and providing test ride of unregistered two wheelers. Nevertheless, Ola Electric kept on with its aggressive growth strategy and in December 2023, the company launched more than 3,200 showrooms in a single night and many of the showrooms, it is reported, are not certified. As for the controversy, Ola’s representative explained that the company’s distribution centers and warehouses are compliant with the laws, but he failed to comment on the absence of trade certificates at the retail level. However, the company’s problems do not end there; complaints from customers regarding quality, service, and vehicle ownership are on the rise. Once India’s leading electric scooter producer, the company has seen its market position erode as rivals Bajaj Auto and TVS Motor outperform it. Since its market debut in August, Ola’s share price has fallen more than 60% and the company has also had to downsize its workforce and face delays in launching e-motorcycles. However, the CEO of Ola Electric, Bhavish Aggarwal, is confident that the company is on the right path to recovery and plans to increase the monthly sales to 50,000 to become profitable.
Ola Electric Faces Trade Certificate Violations
