Ola Electrical Shops See Raids, Seizures on Flouting India Guidelines

Ola Electrical Mobility Ltd.’s speedy enlargement into brick-and-mortar showrooms is working into regulatory hassle.

The Bengaluru-based electrical scooter maker, as soon as a champion of the digital-only gross sales mannequin, just lately scaled as much as 4,000 bodily places since 2022. A Bloomberg Information investigation has discovered that out of roughly 3,400 showrooms for which knowledge is offered, just a little over 100 places had commerce certificates required beneath India’s Motor Autos Act.

Meaning greater than 95% of the shops on which Bloomberg Information noticed the info, lacked primary certification wanted to show, promote, provide check rides on or transport unregistered two-wheelers.

In response to buyer complaints, transport authorities throughout Indian states have performed raids, closed showrooms, seized automobiles and despatched show-cause notices querying the Bhavish Aggarwal-led agency, in keeping with inside paperwork and authorities warning letters seen by Bloomberg Information.

The nation’s Motor Autos Act mandates that each auto showroom, together with two-wheelers, ought to have a commerce certificates conspicuously displayed if it retains unregistered automobiles, in keeping with Hans Kumar, a retired assistant transport commissioner who labored within the western Indian state of Rajasthan.

At the least six native transport officers in interviews with Bloomberg Information mentioned they have been probing Ola for alleged violations, reflecting the darkish underbelly of Ola’s aggressive enlargement.

“Your ‘investigation’ findings that there’s non-compliance are misplaced and prejudiced,” an Ola spokesperson mentioned in an emailed response. Ola maintains a listing of unregistered automobiles at its distribution facilities and warehouses throughout Indian states “that are absolutely compliant with the rules of the Motor Autos Act, and have the required approvals,” he added.

Ola’s response didn’t straight reply whether or not their public-facing shops had commerce certificates or if the agency had seen the raids, seizures by native transport regulators.

Battling Crises

The startup, as soon as India’s largest scooter maker, is now battling crises on a number of fronts. Shares have plunged over 60% from its peak since itemizing in August.

It has additionally confronted purchaser complaints on high quality and repair points, social media backlash and widening losses in current months. Aggarwal mentioned in an October publish on X that Ola was increasing its community to deal with buyer complaints.

The regulatory challenges come as the corporate lays off over a thousand workers and contract staff, Bloomberg Information reported this month, the place Ola acknowledged that some roles have been getting redundant because it recast and automatic part of its operations.

It is also racing to roll out its e-motorcycles, that are delayed since Aggarwal had indicated a January launch at an occasion final yr. Ola spokesperson didn’t reply a question on the delayed motorbike launch.

Based on almost two dozen notices despatched by state-level transport officers and seen by Bloomberg Information, transport officers throughout India have stepped up scrutiny and sometimes discovered Ola falling in need of the commerce certificates requirement on the retailer degree.

Ola sporadically utilized and obtained commerce certificates in some places in response to move division’s notices or raids, in keeping with paperwork seen by Bloomberg Information.

The primary warning to Ola about these violations dates again to at the very least 2023, with the newest coming in early March. Transport officers in a number of states confirmed ongoing investigations into Ola’s showroom operations.

Within the midst of all of the regulatory motion, Ola introduced a retailer launch blitz in December including in a single day greater than 3,200 new places. Most of those new shops do not have the required commerce certificates, in keeping with paperwork seen by Bloomberg Information.

The emailed response from Ola didn’t touch upon the transport officers’ probes or the dearth of certification in these newer shops.

Ola instructed transport authorities since at the very least late 2023 that its expertise facilities are merely for “buyer engagement” and never direct gross sales, in keeping with paperwork seen by Bloomberg Information, however regulatory probes have continued throughout states.

Ola instructed exchanges on Feb. 19 that it was re-negotiating phrases with two of its companies engaged in automobile registration in authorities regional transport workplaces. This might impression February’s automobile registration numbers within the authorities database, it added.

Purple Flag

The scooter maker, in a Feb. 28 change submitting, mentioned it had offered “over 25,000 automobiles” final month whereas a authorities portal VAHAN reveals that simply over 8,600 have been registered. This huge hole is doubtlessly a purple flag since clients can not obtain unregistered automobiles in India.

Indian automakers usually solely depend registered automobiles of their gross sales. Not registering all of the invoiced automobiles even every week after Ola introduced its gross sales quantity to exchanges — native guidelines give it as much as a seven-day window — dangers placing it at odds with state authorities legal guidelines.

“The registration figures for February 2025 gross sales will likely be up to date on the VAHAN portal within the subsequent few weeks,” Ola spokesperson mentioned within the e mail, including that this delay was already flagged in an change submitting final month.

The widespread store-level non-compliance comes on the again of rising strain to spice up scooter gross sales and plummeting share value.

Ola has additionally misplaced market share — and its high spot within the two-wheeler market — as legacy producers Bajaj Auto Ltd. and TVS Motor Co. acquire floor, in keeping with knowledge compiled by the federal government’s VAHAN database.

Regardless of its mounting challenges, Ola’s Aggarwal mentioned the agency will publish a turnaround quickly.

“We are able to anticipate auto phase Ebitda breakeven at about 50,000 month-to-month gross sales,” Aggarwal instructed analysts in a Feb. 7 earnings name. “We do really feel within the subsequent few quarters, we are able to get to about 50,000.”

© 2025 Bloomberg L.P.

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