Ola Electric Mobility’s showroom expansion has run into a regulatory crisis. Due to customer complaints, transport authorities across the country raided several Ola Electric showrooms, resulting in closures, vehicle seizures, and a show-cause notice to the company. The key issue is that many Ola showrooms lack the mandatory trade certificate, which is required under regulations for displaying and selling unregistered vehicles.
Lack of Trade Certificates
Since 2022, Ola Electric has expanded its showroom network to 4,000 locations. However, according to a Bloomberg report, out of 3,400 showrooms, only around 100 had the necessary trade certificates under the Motor Vehicles Act. This means that over 95% of Ola’s showrooms were operating without proper certification, displaying, selling, and transporting vehicles in violation of the law.
Ola Electric’s Response
Transport authorities have stated that they are investigating Ola Electric for these violations. However, the company has dismissed these claims as biased and misleading.
- Ola claims that its warehouses and distribution centers store unregistered vehicles legally and have obtained necessary approvals under the Motor Vehicles Act.
Ongoing Challenges for Ola Electric
Ola Electric has been facing multiple crises in recent months:
- Stock Decline: Since its August 2024 listing, Ola Electric’s stock has fallen by over 25%, and it is now 64% below its all-time high.
- Quality & Service Issues: The company has faced customer complaints and criticism on social media, leading to reputational damage.
- Regulatory Scrutiny: Transport authorities across India have issued nearly two dozen notices to Ola Electric for showroom compliance failures.
While Ola has applied for trade certificates at some locations, the regulatory issue remains unresolved, posing a major challenge to its expansion plans
