Ola Electric shares slip 6% following CCPA's show cause notice over surging consumer complaints

The CCPA issued the notice after registering 9,948 complaints against Ola Electric on the National Consumer Helpline between September 1, 2023, and August 30, 2024. 

Ola Electric has 15 days to respond, after which regulatory action could be taken if no response is received.

Ola Electric's shares fell by over 8 percent on Monday, closing at Rs 90.82 per share.

Last year, Ola Electric, along with Ather Energy, TVS Motor, and Hero MotoCorp’s Vida, was investigated for violating pricing norms under the second phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme. 

The CCPA’s notice points to a series of alleged violations under the Consumer Protection Act, 2019, such as deficiencies in service, unfair trade practices, and misleading advertisements. 

Of the nearly 10,000 complaints filed against Ola Electric, 3,364 related to slow repairs and service, 1,899 to delayed deliveries of its electric scooters, and 1,459 to unfulfilled promises regarding product features and services. 

Additionally, some consumers accused the company of exaggerated advertisements, claiming that the performance and features of the products were overstated. 

In response to the growing dissatisfaction, Aggarwal publicly stated on X that the company is "rapidly expanding the service network" and working to clear service backlogs.

In September, the company's sales declined by 10.6 percent, with only 24,665 units sold, down from 27,589 in August. 

Ola, which once commanded a dominant 52 percent share of the electric two-wheeler (e2W) market in April, saw its market share plummet to 27 percent by September, indicating a significant shift in the competitive landscape.