November 14, 2024 03:22 (IST)
Follow us:
Ola Electric Ola Electric shares slip 6% following CCPA's show cause notice over surging consumer complaints
Bengaluru/IBNS: Shares of Ola Electric Mobility dropped 6 percent on Tuesday (Oct. 8), hitting a day's low of Rs 85.21 on the BSE, after the Central Consumer Protection Authority (CCPA) issued a show-cause notice to the Bhavish Aggarwal-led EV company, raising concerns over the increasing number of consumer complaints.
Late on Monday (Oct. 7), Ola Electric informed the stock exchange that it had received a show-cause notice from the CCPA and plans to respond within the 15-day deadline.
The company stated that the notice "would not affect its financial, operational, or other business activities."
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.
These complaints cover a wide range of issues, including delayed deliveries, defective vehicles, misleading advertisements, and poor customer service.
Ola Electric has 15 days to respond, after which regulatory action could be taken if no response is received.
The notice follows a social media altercation between Bhavish Aggarwal, Ola Electric’s founder-CEO, and comedian Kunal Kamra.
Kamra criticized Ola's electric scooters and tagged Union Minister Nitin Gadkari in a post on X (formerly Twitter).
Aggarwal, however, dismissed Kamra’s comments as “paid.”
Ola Electric's shares fell by over 8 percent on Monday, closing at Rs 90.82 per share.
This isn’t the first time the three-year-old company has faced regulatory scrutiny.
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.
These companies were accused of billing chargers separately, thus breaching the Rs 1.5 lakh ex-factory price limit meant to make EVs more affordable.
In response, the companies agreed to reimburse approximately Rs 300 crore to consumers in May 2023, with Ola refunding Rs 130 crore to around 100,000 customers.
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.
The CCPA, under the Ministry of Consumer Affairs, is tasked with protecting consumer rights and enforcing fair trade practices.
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.
Many customers also cited faulty vehicles with manufacturing defects, poor build quality, and recurring technical problems, eroding consumer trust.
Additionally, some consumers accused the company of exaggerated advertisements, claiming that the performance and features of the products were overstated.
Another common complaint involved inadequate customer service, with customers reporting difficulty reaching support, slow response times, and unresolved issues.
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.
Ola Electric has also faced a sharp drop in sales.
In September, the company's sales declined by 10.6 percent, with only 24,665 units sold, down from 27,589 in August.
Meanwhile, competitors like Bajaj, TVS, and Ather posted sales increases of 13 percent, 2 percent, and 15 percent, respectively, according to data from Vahan, the Ministry of Road Transport and Highways' vehicle registration database.
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.
On Monday, Ola Electric’s market capitalization fell below $5 billion for the first time since its August listing, closing at $4.7 billion on October 7—a stark drop from its IPO valuation, which peaked above $7 billion with an issue price of Rs 76 per share, according to reports.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
Support objective journalism for a small contribution.
Latest Headlines
India's outward FDI grows $3.24 billion in Oct 2024: RBI data Thu, Nov 14 2024
India inches closer to non-fossil fuel target as renewable energy capacity crosses 200 GW Wed, Nov 13 2024
Reliance Retail temporarily shuts down Centro stores to focus on in-house brands amid strategic revamp Wed, Nov 13 2024
India’s edible oil imports drop 3.09% to 159.6 lakh tonnes Wed, Nov 13 2024
Hyundai Motor India aims to establish itself as a global production hub amid rising demands Wed, Nov 13 2024
Swiggy shares jump 15% following modest market debut Wed, Nov 13 2024
Market crash: Sensex, Nifty 50 fall for 5th consecutive session; drops over 9% from peak Wed, Nov 13 2024
India’s industrial output rebounds with 3.1% growth in September, driven by manufacturing Wed, Nov 13 2024
ONGC Q2FY25 standalone net profit grows 17% to Rs 11,984 cr Tue, Nov 12 2024