Ola Electric Gets Central Agency's Notice Over Service Deficiencies, Misleading Ads Amid Complaints: Report

The Central Consumer Protection Authority has reportedly issued a showcause notice to Ola Electric due to complaints alleging service inefficiencies, misleading ads, and other violations.

File Photo of Bhavish Aggarwal, CEO of Ola Cabs and founder of Ola Electric

Source : PTI

The Union government has reportedly intervened to address mounting consumer grievances against e-scooter manufacturer Ola Electric. The Central Consumer Protection Authority (CCPA) has taken cognisance of thousands of complaints regarding service deficiencies, issuing a showcause notice to the company, Business Today TV reported citing government sources.

The showcause notice, dated 3 October, highlighted that Ola Electric "appears to be in violation of several provisions of the Consumer Protection Act, 2019," including deficiencies in services, misleading advertisements, unfair trade practices, and violations of consumer rights. The company has been given 15 days from the receipt of the notice to respond, Business Today TV's report stated.

The National Consumer Helpline (NCH), operated by the Department of Consumer Affairs, recorded 10,644 complaints related to Ola Electric's e-scooters between 1 September 2023 and 30 August 2024. Of these, 3,389 complaints (nearly one third) involved delays in providing services for its e-scooters, while 1,899 complaints were about delays in delivering new vehicles. Another 1,459 complaints were registered for services promised but not delivered.

The showcause notice further detailed consumer allegations, including claims of vehicles sold with manufacturing defects, second-hand vehicles being sold as new, partial or no refunds on booking cancellations, recurring defects even after servicing, overcharging, inaccurate invoices, and a multitude of issues with batteries and vehicle components, according to the report. Additionally, complaints were lodged against Ola Electric for unprofessional conduct and improper complaint closures.

According to the report, Nidhi Khare, Secretary of the Department of Consumer Affairs, stated, "The CCPA is looking into a large number of complaints about Ola Electric, mainly related to service inefficiencies. We hope the company addresses these concerns promptly and resolves the issues faced by consumers."

The NCH (toll-free number 1915) is a platform for consumers to seek redressal against businesses and service providers.

Ola Electric Witnesses 9% Drop In Stock Price Amid Service Deficiencies

Meanwhile, Bhavish Aggarwal-led Ola Electric witnessed a sharp drop in its stock price, crashing to  Rs 89.71 per share, a 9 per cent decline from the previous session. The company, which debuted in the stock market at Rs 76 and once touched a peak of Rs 157.40, has since seen a decline of 42-43 per cent, largely due to hardware and software issues with its e-scooters and deteriorating conditions at its service centres.

Ola Electric’s market share in the Indian EV sector continues to drop, shrinking to 27 per cent in September with sales of 24,665 e-scooters, down from 27,587 in August, according to the government transportation portal, Vahan. The company’s rivals have launched newer models priced competitively against Ola’s flagship S1 series, which has been plagued by recurring issues including malfunctioning hardware, glitching software, and a shortage of spare parts, leading to significant service delays.

In a recent incident reflecting growing consumer frustration, an aggrieved customer in Karnataka reportedly set an Ola Electric showroom on fire following persistent complaints about the company’s electric vehicles. The company reportedly receives around 80,000 complaints every month.