After CCPA Notice, Govt Amps Up The Heat On Ola Electric

Just days after the Central Consumer Protection Authority (CCPA) issued a show cause notice to Ola Electric, the Centre has now stepped up the heat on the EV maker. 

As per Livemint, the Ministry of Heavy Industries (MHI) has written to the Automotive Research Association of India (ARAI) to verify if the EV maker is indeed honouring warranties and maintaining service centres as required. 

It is pertinent to note that ARAI approved Ola Electric’s eligibility for subsidies under the Faster Adoption & Manufacturing of Electric Vehicles II (FAME-II) and the production linked incentive (PLI) schemes. 

If the MHI finds wrongdoing on part of Ola Electric, the original equipment manufacturer (OEM) could likely lose incentives and sops under the two above mentioned schemes. The two initiatives mandate EV makers, which receive subsidies, to provide a warranty of three years or 20,000 km, whichever is earlier, to the consumers. 

The Ministry of Roads, Transport and Highways (MoRTH) also plans to separately approach the consumer protection watchdog regarding information about complaints that flag issues such as selling second-hand scooters as new, charging more than promised, and manufacturing defects that could impact battery safety, the report said, citing sources. 

Meanwhile, consumer affairs secretary Nidhi Khare told Mint that the CCPA will pursue class action against Ola Electric on account of “thousands of unresolved complaints” against the EV major lodged with the National Consumer Helpline (NCH).

“With such a high volume of complaints – over 10,000 in a year, related to issues like delays in refunds, service delays, refusal of warranties and inconsistencies in performance – this case was a clear candidate for class action. When we encounter such cases, where repeated violations occur, we pursue class action after carefully examining the facts,” Khare reportedly said. 

She added that over 10,000 “dockets, documenting complaints received by NCH, have been sent to the company for investigation and resolution. As per Khare, the complaints against the company range from delay in refunds to refusal of warranties and performance inconsistencies.

“Companies should treat complaints as valuable feedback for improvement—complaints are their ears and eyes. Yet, one of the troubling findings was that Ola Electric had been charging customers even during the free service period, which is simply unacceptable,” she added.

This comes days after the CCPA shot off a show cause notice to Ola Electric over alleged violations of consumer rights, misleading advertisement and unfair trade practices. The consumer watchdog directed the EV maker to respond to the show cause notice within 15 days. 

The crackdown came right after comedian Kunal Kamra, in a post on X, slammed the company over its unsatisfactory after-sales services. In response, Ola Electric founder and CEO Bhavish Aggarwal trained guns at the comedian and accused Kamra of taking money to criticise the company.

The company has come under regulatory scanner at a time when legacy players such as TVS and Bajaj are eating into its market share. For context, in September 2024, Ola Electric’s two-wheeler registrations declined 11% month-on-month (MoM) to 23,965 units, the lowest sales since October 2023.

Meanwhile, on the financial front, losses continue to pile up. The EV major reported a net loss of INR 347 Cr in the first quarter (Q1) of the financial year 2024-25 (FY25), up 30% from INR 267 Cr in Q1 FY24. Operating revenue rose 32% to INR 1,644 Cr during the quarter under review as against INR 1,243 Cr in Q1 FY24.