Ola Electric gets show cause notice from CCPA

India’s largest electric scooter maker Ola Electric has received show cause notice from the Central Consumer Protection Authority (CCPA) for alleged violation of consumer rights, misleading advertisement and unfair trade practices.

In a regulatory filing, Ola Electric says the Central Consumer Protection Authority has provided a timeline of 15 days to the company to respond to the show cause notice. Ola Electric says it will respond to the CCPA within the given timeframe with the supporting documents.

“Currently, the Show Cause Notice has no impact on financial, operational or other activities of the company. Furthermore, the Show Cause Notice which is issued by Central Consumer Protection Authority does not impose any penalties or financial fines,” the filing says.

Shares of Ola Electric fell 6% in opening trade on Tuesday to hit a low of ₹85.21 on the BSE. The company, which made its public market debut on August 9, 2024, has witnessed profit booking after its shares hit ₹157.53 levels.

This comes when social media platforms have been flooded with complaints of service delays at Ola service stations. Ola has said it will aggressively expand its network by on-boarding 10,000 partners, across sales and service, by the end of 2025. Ola Electric currently has around 800 company-owned stores but only about 500 service centres. The company plans to double its service network to 1,000 centres by December 2024.

The electric two-wheeler maker slashed prices of its scooters as part of a campaign for the festive season earlier this month. Under the campaign, the company has announced entry into its S1 portfolio for as low as ₹49,999. “This would be the perfect time for EVs to scale up and give ICE vehicles a run for their money,” Bhavish Aggarwal, chairman and MD, Ola Electric, said at the time.

These discounts come as sales of Ola Electric fell for the second straight month in September even as legacy automakers Bajaj Auto and TVS saw an increase in EV registrations, according to Vahan data. Ola Electric sold 23,965 electric scooters in September, down 11% compared with 26,928 units sold in August. While Ola Electric has lost its market share, legacy manufacturers have seen a jump in sales.

Bajaj Auto sold 18,933 electric scooters in September, taking over TVS Motor as the second-largest electric two-wheeler player during the month. Bajaj retailed 16,650 e-scooters in August. TVS Motor sold 17,865 electric scooters in September, up 2.4% from 17,442 units in August. Hero MotoCorp-backed Ather Energy clocked 12,579 EV registrations in September, up 15% from 10,919 in August. Hero MotoCorp sold 4,174 electric scooters on its own  last month compared with 4,596 units in August.

Electric vehicles currently comprise 20% of scooter sales in India. However, only 5% of all two-wheeler sales are EVs. That’s because two-thirds of India’s two-wheeler market consists of motorcycles.