New Delhi: In a dramatic turn of events, Ola Electric, once a trailblazer in digital-only sales, finds itself entangled in a regulatory quagmire. The company’s aggressive expansion into brick-and-mortar showrooms has been marred by a glaring lack of necessary trade certificates, leading to widespread raids and closures by transport authorities across India. This crisis highlights the challenges of rapid growth and the importance of compliance in the automotive sector.
Ola Electric has expanded its physical presence to over 4,000 showrooms since 2022, but a staggering 95% of these locations lack the trade certificates mandated by the Motor Vehicles Act. This legislation requires all auto showrooms, including those selling two-wheelers, to display a trade certificate if they handle unregistered vehicles. The absence of these certificates has led to a series of raids, closures, and seizures by transport officials in multiple states, including Madhya Pradesh, Goa, and Maharashtra.
While Ola maintains that its distribution centers comply with regulations, the status of its public-facing stores remains unclear. The company has faced criticism for its handling of customer complaints and service issues, contributing to a plummeting stock price and loss of market share. Furthermore, Ola is grappling with a significant gap between reported sales and registered vehicles, which could potentially violate state laws.
Ola Electric is battling crises on multiple fronts. Besides regulatory issues, the company is dealing with declining shares, customer dissatisfaction, and a delayed launch of its e-motorcycles. As legacy manufacturers like Bajaj Auto and TVS Motor gain ground, Ola’s once-dominant position in the two-wheeler market is under threat. The company’s efforts to expand its network and address customer concerns are overshadowed by these mounting challenges.
