Ola Electric Showrooms Raided Across India For Trade Certificate Violations: Report

India's Motor Vehicles Act requires that all auto showrooms, including those selling two-wheelers, prominently display a trade certificate if they keep unregistered vehicles

In response to customer complaints, transport authorities in various Indian states have carried out raids, shut down showrooms, seized vehicles, and issued show-cause notices to the firm

Source : Ola Electric

Ola Electric Mobility’s rapid expansion into physical showrooms is facing regulatory challenges. The electric scooter manufacturer, previously a strong advocate of a digital-only sales model, has quickly scaled up to 4,000 brick-and-mortar locations since 2022. However, a Bloomberg report revealed that, out of around 3,400 showrooms with available data, only slightly over 100 had the trade certificates required under India’s Motor Vehicles Act.

This means that more than 95 per cent of the stores reviewed by Bloomberg lacked the necessary certification to display, sell, offer test rides, or transport unregistered two-wheelers.

In response to customer complaints, transport authorities in various Indian states have carried out raids, shut down showrooms, seized vehicles, and issued show-cause notices to the Bhavish Aggarwal-led company, according to internal documents and government warning letters reviewed by Bloomberg.

India's Motor Vehicles Act

India's Motor Vehicles Act requires that all auto showrooms, including those selling two-wheelers, prominently display a trade certificate if they keep unregistered vehicles, according to Hans Kumar, a retired assistant transport commissioner who served in the western state of Rajasthan, states the report.

In interviews with Bloomberg News, at least six local transport officials confirmed they are investigating Ola for potential violations, shedding light on the issues behind the company's aggressive expansion.

Spokesperson Statement

"Your ‘investigation’ findings that there is non-compliance are misplaced and prejudiced," an Ola spokesperson stated in an emailed response to Bloomberg. He further emphasised that Ola maintains an inventory of unregistered vehicles at its distribution centres and warehouses across India, which are fully compliant with the Motor Vehicles Act and have the required approvals.

However, Ola’s response did not directly address whether its public-facing stores had the necessary trade certificates or if the company had been subject to raids and seizures by local transport regulators.