Ola Electric Faces Regulatory Scrutiny Over Showroom Expansion and Trade Certificates
Ola Electric Mobility, led by Bhavish Aggarwal, is facing increasing regulatory challenges as the company’s rapid expansion of physical showrooms has come under scrutiny.
Dubai: Ola Electric Mobility, led by Bhavish Aggarwal, is facing increasing regulatory challenges as the company’s rapid expansion of physical showrooms has come under scrutiny. According to a Bloomberg News report, Ola Electric has grown its network to 4,000 showrooms since 2022, but a significant number of these stores are operating without the necessary trade certificates, a requirement under India’s Motor Vehicles Act.
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Lack of Trade Certificates Raises Concerns
The report reveals that only about 100 out of 3,400 Ola Electric showrooms, for which data is available, have the required trade certificates. This means over 95% of the company’s physical stores do not have the necessary certification to display, sell, or offer test rides on unregistered two-wheelers.
The absence of trade certificates is a violation of the Motor Vehicles Act, which mandates that auto showrooms, including two-wheeler stores, must prominently display a trade certificate if they keep unregistered vehicles. Transport officials in various states have initiated probes and, in some cases, raided Ola Electric showrooms, seizing vehicles and sending show-cause notices to the company.
Transport Authorities Launch Raids and Close Showrooms
In response to customer complaints, transport authorities across multiple states have raided Ola Electric’s showrooms and closed several locations for failing to meet regulatory standards. Transport officials have also issued show-cause notices, with at least six local transport officials confirming that investigations into Ola’s operations are ongoing.
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Hans Kumar, a retired assistant transport commissioner from Rajasthan, highlighted the legal requirements, stating, “Every auto showroom, including two-wheelers, should have a trade certificate if it keeps unregistered vehicles.” Despite the regulatory pressure, Ola Electric has not directly addressed whether its public-facing stores are compliant with the Motor Vehicles Act.
Ola Electric Responds to Allegations
In a response to Bloomberg News, an Ola spokesperson dismissed the claims of non-compliance, calling the investigation “misplaced and prejudiced.” The company emphasized that it maintains an inventory of unregistered vehicles at its distribution centers and warehouses, which are fully compliant with the Motor Vehicles Act. However, the spokesperson did not provide clarity on whether the showrooms themselves had the necessary trade certificates or if they had been impacted by the raids and seizures.
Ola Faces Multiple Crises Amidst Regulatory Troubles
Ola Electric, once India’s leading scooter maker, is currently grappling with a series of challenges. The company’s shares have fallen more than 60% since their peak after listing in August 2024. Along with regulatory issues, Ola has faced customer complaints regarding product quality and service, social media backlash, and mounting financial losses.
In addition to regulatory troubles, Ola Electric has also been forced to lay off over a thousand employees, acknowledging that certain roles have become redundant as it automates and reconfigures parts of its operations. Moreover, the company is facing delays in the rollout of its e-motorcycles, with Bhavish Aggarwal previously announcing a January launch at an event last year.
Sale Figures Raise Red Flags
Ola Electric’s sale figures have also raised concerns. While the company reported selling over 25,000 vehicles in February 2025, the government’s VAHAN portal showed that only 8,600 vehicles were registered. This discrepancy has been flagged as a potential red flag, as unregistered vehicles cannot be legally delivered to customers in India.
Ola Electric has explained that the registration numbers for February will be updated in the coming weeks, but the delay further complicates its compliance issues.
Challenges Amidst Market Competition
As Ola Electric battles regulatory scrutiny, it also faces increased competition from established manufacturers like Bajaj Auto and TVS Motor Co., who have gained market share, pushing Ola Electric out of the top spot in the two-wheeler market.
Despite these setbacks, Bhavish Aggarwal remains optimistic about a turnaround, stating that the company expects to reach a breakeven point in the auto segment at around 50,000 monthly sales.
