Ola Electric Faces Regulatory Heat: Transport Authorities Conduct Raids, Send Show-Cause Notices

New Delhi (The Uttam Hindu): Ola Electric Mobility Ltd. is facing regulatory trouble, with transport authorities across various states conducting raids, closing showrooms, seizing vehicles, and sending show-cause notices. The issue at hand is that Ola's stores allegedly do not have the required trade certificates to display, sell, or offer test rides on unregistered two-wheelers. According to internal documents and government warning letters, only 3,400 of Ola's showrooms (for which data is available) have the necessary certification. This comes after the company recently scaled up to 4,000 physical locations. India's Motor Vehicles Act mandates that every auto showroom, including two-wheers, display a trade certificate if it keeps unregistered vehicles. At least six local transport officials are probing Ola for alleged violations, with the first warnings dating back to 2023.

Ola has denied the allegations, stating that its experience centers are for "customer engagement" only and not for direct sales. The company claims it maintains an inventory of unregistered vehicles at its distribution centers and warehouses, which are fully compliant with the Motor Vehicles Act. However, Ola has sporadically applied for and obtained trade certificates in some locations in response to transport department notices or raids. This regulatory issue is just one of the many challenges Ola is facing. The company has been battling quality and service issues, lost its top spot in market share to Bajaj Auto and TVS Motor Co, delayed its electric motorcycle launch, and planned a layoff affecting over 1,000 employees. As a result, Ola's shares have plunged over 60% from their peak since listing in August last year.