Ola Electric Faces Show Cause Notice Over Consumer Complaints Amid Stock Decline

The central government has stepped in to address numerous consumer complaints about Ola Electric, an e-scooter manufacturer. On October 3, the Central Consumer Protection Authority (CCPA) issued a show cause notice to the company, citing possible violations of the Consumer Protection Act, 2019. Ola Electric has 15 days to respond to the notice.

From September 1, 2023, to August 30, 2024, the National Consumer Helpline has recorded 10,644 complaints against Ola e-scooters. Among these, 3,389 complaints are related to service delays, 1,899 involve delays in delivering new vehicles, and 1,459 concern unfulfilled promised services. The show cause notice highlights issues such as manufacturing defects, selling second-hand vehicles, incomplete refunds for cancellations, recurring problems after servicing, overcharging, inaccurate billing, and battery and component issues. There are also complaints about unprofessional behavior and inadequate complaint resolutions.

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Nidhi Khare, Secretary of the Department of Consumer Affairs, confirmed the high volume of complaints about Ola Electric, particularly regarding service inefficiencies. “The CCPA is looking into many complaints about Ola Electric. We hope the company addresses these concerns quickly,” she said.

Ola Electric has not publicly commented on the notice yet. Meanwhile, its stock has dropped nearly 9% to an intra-day low of INR 90.26, following public criticism and a dispute on social media between comedian Kunal Kamra and Ola founder Bhavish Aggarwal.

Ola Electric’s shares launched on August 9, initially performing well and hitting the upper circuit of 20% for three straight days. However, the stock price has since fallen 74% from its peak of INR 157.40. The company raised INR 6,154 crore through its IPO, which was subscribed 4.27 times, indicating strong initial investor interest. The IPO price range was set between INR 72 and INR 76 per share.

In the first quarter of the fiscal year 2025, Ola Electric reported a consolidated net loss of INR 347 crore, up from a loss of INR 267 crore during the same period last year. Despite these losses, the company’s revenue from operations grew by 32.3% year-on-year, reaching INR 1,644 crore for the quarter, compared to INR 1,243 crore the previous year.