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Shares of Ola Electric fell nearly 3% on Monday, marking the third straight session of decline, as the company faces scrutiny over its pricing practices. The Automotive Research Association of India (ARAI), under the Ministry of Heavy Industries, has asked the electric vehicle (EV) manufacturer to clarify recent price cuts on its S1 X 2 kWh electric scooter during a promotional sale.
Ola Electric’s stock closed at Rs 87.44 per share, continuing its decline from an all-time high of Rs 157.40. If the company fails to provide a satisfactory explanation to the ARAI, it could face legal action and may lose access to subsidies offered under the government’s PM Electric DRIVE Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme.
Reports suggest that if pricing violations are discovered, Ola Electric could face penalties in line with E-DRIVE guidelines. The probe adds to the growing list of regulatory challenges facing Bhavish Aggarwal’s EV firm.
Growing Consumer Complaints
In addition to the ARAI inquiry, Ola Electric has been hit with a notice from the Central Consumer Protection Authority (CCPA). The notice follows over 10,000 complaints filed with the National Consumer Helpline (NCH) over the past year, mostly related to poor after-sales service.
Ola Electric has been given 15 days to respond to the CCPA’s show-cause notice. The complaints range from unresolved technical issues to delays in refunds and subpar customer support.
The government has also directed Ola Electric to implement better consumer protections for its ride-hailing services, including offering customers the option to choose their preferred refund method and ensuring that proper invoices are provided for all auto rides booked through its platform. Since the beginning of 2024, over 2,000 complaints have been registered against Ola’s ride-hailing service, many citing discrepancies between the fare shown at booking and the amount charged.
The ongoing investigations and consumer complaints highlight the challenges Ola Electric faces in maintaining customer trust and complying with regulatory standards. As Ola continues to expand its EV portfolio, addressing these issues will be crucial for restoring investor confidence and ensuring long-term growth.
