Ola Electric, headquartered in Bengaluru, Karnataka, is facing regulatory scrutiny over alleged violations in its showroom operations. The company, led by Bhavish Aggarwal, has been expanding rapidly but has encountered compliance issues related to trade certificates. Transport authorities have raided stores, seized vehicles, and issued show-cause notices due to non-compliance with the Motor Vehicles Act. Despite these challenges, Ola maintains its expansion plans and aims to address regulatory concerns.
Ola Electric, a prominent electric vehicle (EV) manufacturer in India, is facing regulatory heat over alleged violations related to its physical showrooms. The company, led by Bhavish Aggarwal, has rapidly expanded its retail network but has encountered compliance issues, with transport authorities across multiple states stepping in to investigate.
Ola Electric has grown its physical store network to nearly 4,000 locations since 2022. However, a Bloomberg report highlighted that out of approximately 3,400 showrooms with available data, only 100 had the necessary trade certificates. These certificates, mandated by the Motor Vehicles Act, are essential for displaying, selling, and offering test rides on unregistered two-wheelers.
Regulatory Crackdown: Raids and Showroom Closures
Responding to customer complaints, transport officials conducted raids on Ola Electric stores, seized vehicles, and shut down several outlets across different states. Show-cause notices were also issued, indicating the seriousness of the alleged non-compliance.
Hans Kumar, a retired assistant transport commissioner from Rajasthan, explained, “The Motor Vehicles Act mandates that every auto showroom, including two-wheeler dealerships, must have a trade certificate to keep and display unregistered vehicles.”
Officials from various states confirmed ongoing investigations, raising concerns about Ola Electric’s aggressive expansion strategy and its adherence to regulations.
Ola Denies Allegations, Calls Report ‘Prejudiced’
In response, Ola Electric dismissed the claims, stating that the Bloomberg report was “misplaced and prejudiced.” A company spokesperson asserted that Ola maintains an inventory of unregistered vehicles at its distribution centers, complying fully with the Motor Vehicles Act.
However, Ola did not directly address whether its public-facing stores possessed the required trade certificates or whether raids and vehicle seizures had indeed occurred.
Market Reaction and Mounting Challenges
The regulatory scrutiny comes at a challenging time for Ola Electric, as its stock has seen a sharp decline, falling over 60% since its listing in August. On March 10, the company’s shares slumped more than 4% in response to the latest developments.
Beyond regulatory issues, Ola Electric has been facing multiple setbacks, including customer complaints over product quality and service, social media backlash, and widening financial losses. The company has also initiated significant layoffs, cutting over a thousand employees and contract workers.
Gaps in Sale Numbers and Vehicle Registrations
Another red flag emerged when discrepancies were found in Ola’s sales figures. In February 2025, the company claimed to have sold over 25,000 vehicles. However, data from the government’s VAHAN portal showed only 8,600 registrations during the same period.
Indian automakers typically report sales based on registered vehicles, and any delay in registering sold vehicles could put Ola Electric at odds with regulatory norms. Ola has maintained that the registration numbers will be updated in the coming weeks.
Future Outlook: Expansion Amidst Regulatory Scrutiny
Despite the ongoing regulatory probes, Ola Electric continues its ambitious expansion plans. In December, the company launched over 3,200 new stores overnight, but many of these locations reportedly still lack trade certificates.
Looking ahead, Ola Electric CEO Bhavish Aggarwal remains optimistic, stating that the company aims to break even at a monthly sales volume of 50,000 units. However, with increased regulatory oversight and competition from established players like Bajaj Auto and TVS Motor, Ola’s path to stability remains uncertain.
As transport authorities across states continue to scrutinize Ola Electric’s compliance practices, the coming months will be crucial for the company’s operations and market position.
