Ola Electric Says Received Notices In 4 States Pertaining To Trade Certificate 

Ola Electric said it has received notices in four states with regard to trade certificates for a few of its stores, and it is in the process of responding to them

This comes amid reports that the company’s stores have been seeing raids by regional transport offices in multiple states of the country for not having the required trade certificates. 

Earlier, a Bloomberg report said that about 95% of the Bhavish Aggarwal-led company’s 3,400 showrooms across India are selling or offering test rides to users without the required trade certificate. While a spokesperson of the company called the agency’s investigation “misplaced” and “prejudiced”, this is the first disclosure by it to the exchanges on the issue.

The disclosure came after the exchanges sought clarification from Ola Electric on news reports about heavy industries ministry (MHI) seeking information from the company about discrepancies in its sales data.

The company said that the MHI and road transport and highways ministry (MoRTH) have sent queries to it about the mismatch in its sales data and registration data on the Vahan portal for the month of February. Besides, they have sought clarification on news reports of its stores operating without trade certificates.

The company said it is in the process of responding to the queries of the ministries. 

In a separate statement, Ola Electric reiterated that the delay in registrations of its vehicles on Vahan was due to its ongoing negotiations with its vendors responsible for registrations.

“This backlog is being rapidly cleared, with daily registrations exceeding 50% of our three-month daily sales average. 40% of the February backlog has already been cleared, and the remaining will be fully resolved by the end of March 2025,” it added.

Amid these, the company’s shares surged over 9% to INR 56.55 during the early morning trade today. At 11:48 AM, the stock was trading 7.96% higher at INR 55.77 on the BSE.

It is pertinent to note that Ola Electric’s vehicle registrations on Vahan portal stood at 8,600 in February, while the company claimed that it sold over 25,000 vehicles last month.

Earlier in February, the company said that its registrations for February would be “temporarily impacted” as it was renegotiating terms of agreements with its agencies Rosmerta Digital Services Pvt Ltd and Shimnit India Pvt Ltd. 

Following this, Rosmerta, earlier this month, filed an insolvency plea against Ola Electric’s subsidiary Ola Electric Technologies for alleged default in payments. obligations. 

Shares of Ola Electric have been under pressure over the past few months over increasing losses, rising competition, and regulatory scrutiny. On a year-to-date basis, its shares have slumped 40%.

The company has embarked on a cost-cutting exercise to reduce its losses. As part of this, it was said to be looking to cut 1,000 jobs.

Recently, Ola Electric said that the cost-cutting exercise has helped it reduce its monthly cash burn by INR 90 Cr.