Ola Electric To Refund INR 130 Cr To Customers Who Were Sold EV Chargers Separately

Bhavish Aggarwal-led electric mobility major Ola Electric will reportedly refund about INR 130 Cr to its customers who bought off-board chargers separately as an accessory while buying Ola S1 Pro electric scooters.

As per a CNBC-TV18 report, Ola Electric informed the government about its decision to reimburse the amount after the Ministry of Heavy Industries (MHI) initiated a probe against it for overcharging customers.

“The Automotive Research Association of India (ARAI) will not be taking any further action against Ola Electric, as the company announced in its letter to ARAI dated April 30, 2023 that, on their own volition, they will reimburse the price (approximately Rs. 130 Cr) of the off-board charger to all customers who have bought the off-board charger as an accessory when purchasing an Ola S1Pro model scooter from FY 2019-20 until March 30, 2023″, a government official was quoted as saying by the publication.

It must be noted that Ola Electric, along with Ather Energy, TVS Motor, and Hero Motocorp, came under the government scanner earlier this year after allegations were raised against these EV original equipment manufacturers (OEMs) for artificially keeping their vehicle prices lower to claim subsidies under the Faster Adoption & Manufacturing of Electric Vehicles (FAME-II) scheme.

The FAME-II scheme, which has a total outlay of INR 10,000 Cr, provides subsidies to electric two-wheelers that retail below INR 1.50 Lakh per unit. As per the allegations against these OEMs, they were charging customers more than the INR 1.5 lakh threshold by billing chargers and proprietary software separately for availing the subsidies.

It must be noted that Ola Electric recently reduced the cost of its S1 Pro escooter to INR 1.25 Lakh from INR 1.39 Lakh earlier, inclusive of the cost of charger and software features. 

An email sent to Ola Electric seeking its comments on the latest development didn’t elicit any response till the time of publishing the article.

As per the report, the OEM is also likely to submit a duly certified statement to ARAI after all its customers receive the due amount. 

On the other hand, a report by the Economic Times said that the MHI had stopped releasing subsidies to Ola Electric and other EV OEMs during the investigation period. However, Ola Electric continued to sell its escooters at a subsidised price, which led to total subsidy dues of around INR 500 Cr. 

The Centre will release the subsidy dues after the investigation is closed.

Meanwhile, the ongoing issues around the FAME-II subsidy, which includes a separate probe on 14 other OEMs for violating localisation norms, have already impacted the growth momentum of the nascent EV industry in India.

While electric two-wheeler demand regained some momentum in March, the registrations of two-wheeler EVs dropped around 23% month-on-month (MoM) to a little over 66,000 units in April.

While most OEMs saw a decline in sales volume last month, Ola Electric posted a marginal rise in its registrations. Its vehicle registrations rose a little over 2% to 21,882 units in April from 21,391 units in March, as per Vahan data on May 2.

While Ola Electric did not issue any statement on the weak sales growth, its rival Ather Energy attributed the MoM dip in its sales in April to the “uncertainty around FAME policy and its cascading impact”.