The Central Consumer Protection Authority has served a showcause notice to Ola Electric after thousands of complaints were filed against its electric scooters. Dated October 3, it accuses the company of violating many provisions of the Consumer Protection Act, 2019. Service deficiencies, misleading advertisements, unfair trade practices, and violations of consumer rights have been the main accusations against Ola Electric.
Between September 2023 and August 2024, the National Consumer Helpline received as many as 10,644 complaints against Ola Electric. Major grievances include failure to deliver service as promised within the time required (3,389 cases), delayed delivery of the products ordered (1,899 cases), and failure to execute promised services or deliveries (1,459 cases).
Other grievances were on account of manufacturing defects, excessive charging and selling of scooters through second-hand channels, and very frequent battery problems. The company has been allowed 15 days to respond to the charges. Its stock decreased by approximately 9% after the story broke out. The complaint appears to be one among many increasing issues with its customers tolerating this problem.
Till now, the company has not issued any official statements regarding the matter. Government officials like Nidhi Khare, Secretary of the Department of Consumer Affairs, have acknowledged the investigation and have asked Ola Electric to quickly address these consumer complaints. The problem has further attracted the attention of the public, most specifically with the social media spat between comedian Kunal Kamra and Ola’s founder, Bhavish Aggarwal.
Showcause notice issued to Ola Electric, but company is planning big for 2025
Bangalore-headquartered Ola Electric Mobility is one of the leading electric two-wheeler manufacturers in India with a market share of 30% of the country for the year 2023. The company manufactures from a plant located in Krishnagiri, Tamil Nadu and currently, it has been offering three electric scooters in the market- Ola S1 Air, Ola S1X, and S1 Pro.
The company is looking at bringing electric motorcycles to the market by the year 2025. Ola Electric began operations in 2017, founded as a subsidiary of the parent company of Ola Cabs, ANI Technologies. Its initially envisaged goal is to target reduced emissions and consumption of fuel. The first pilot program was initiated in Nagpur, which released electric cabs, buses, and rickshaws with corresponding charging infrastructure.
Initially, it has set a target of 1 million electric vehicles in its cab fleet by 2022. Founder Bhavish Aggarwal took a 92.5% stake in the newly spun-out company of Ola Electric at the end of 2018. It retained 7.5% equity, using the brand of “Ola”. In 2019, Ola Electric raised substantial funding: $56 million from Tiger Global and Matrix India, Ratan Tata invested in the Series A round, and another $250 million from SoftBank in the Series B round, valuing its business over $1 billion.
Also, see: A showroom of Ola Electric was burnt down by a furious customer – Who was at mistake?
