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Ola Electric shares fell over 4% following reports of regulatory issues, including raids, vehicle seizures, and showroom shutdowns
Ola Electric Scooter. (File photo)
Ola Electric Showrooms Raided: Shares of Ola Electric, the electric two-wheeler manufacturer led by Bhavish Aggarwal, fell 5% on Monday, March 10, following reports of regulatory issues, including raids, vehicle seizures, and showroom shutdowns.
A Bloomberg report revealed that the company is facing scrutiny from government authorities for violating India’s Motor Vehicles Act. The report stated that transport authorities across various Indian states conducted raids, closed showrooms, seized vehicles, and issued show-cause notices to the company in response to customer complaints. According to the investigation, more than 95% of the approximately 3,400 showrooms reviewed lacked the necessary trade certificates required by the Motor Vehicles Act to sell, display, or offer test rides of unregistered two-wheelers.
India’s Motor Vehicles Act mandates that every auto showroom, including that of two-wheelers, should have a trade certificate conspicuously displayed if it keeps unregistered vehicles.
The report further indicated that at least six local transport officials are investigating Ola Electric for alleged violations. However, an Ola spokesperson dismissed the reports, calling them “misplaced” and “prejudiced.”
Ola Electric has informed transport authorities since at least late 2023 that its experience centers are intended for “customer engagement” rather than direct sales, according to reports.
The company has denied the allegations, with an Ola spokesperson stating that the findings of non-compliance are “misplaced” and “prejudiced.” The spokesperson further clarified that Ola’s inventory of unregistered vehicles at its distribution centers and warehouses across India is fully compliant with the Motor Vehicles Act and has the necessary approvals.
Additionally, the company has occasionally applied for and obtained trade certificates at specific locations in response to transport department notices or raids.
Ola Electric is also grappling with other challenges, including widespread customer complaints about quality and service, a decline in market share to Bajaj Auto and TVS Motor Co, delays in its electric motorcycle launch, and plans for a layoff of over 1,000 employees this month.
Ola Electric’s shares fell to Rs 54.11, approaching its 52-week low of Rs 53.71, which was recorded on March 3 after reports of plans to lay off over 1,000 employees. The stock has experienced a significant 52% decline over the past six months, and it has dropped 36% in 2025 alone. Since its listing in August, Ola Electric’s stock is now more than 60% below its peak.
Additionally, Ola Electric reported sales of 25,000 units in February, falling short of the 50,000-unit target set by Aggarwal to achieve EBITDA breakeven.
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