Ola Electric has acknowledged receiving a show cause notice from the Central Consumer Protection Authority (CCPA), according to an exchange filing by the company. The notice, received via email on October 7, 2024, accuses the company of violating consumer rights, engaging in misleading advertisements, and unfair trade practices. Ola Electric has stated that it will file a formal response to the CCPA and confirmed that the notice does not currently affect its financial or operational activities. "The show cause notice has no impact on financial, operational, or other activities of the company. Furthermore, it does not impose any penalties or financial fines," the company clarified.
The CCPA’s action follows a series of consumer complaints about service deficiencies related to Ola Electric’s e-scooters. According to the National Consumer Helpline, 10,644 complaints were lodged against the company between September 2023 and August 2024. Of these, 3,389 complaints were related to service delays, and 1,899 involved delays in the delivery of new vehicles. Consumers also raised concerns about vehicles with manufacturing defects, second-hand vehicles being sold as new, and unresolved issues despite multiple service attempts.
The notice outlines that Ola Electric appears to be in violation of the Consumer Protection Act, 2019, particularly in areas related to deficient services and unfair trade practices. The company has been asked to respond to the allegations within 15 days.
Nidhi Khare, Secretary of the Department of Consumer Affairs, confirmed that the CCPA is investigating a large volume of complaints. “We hope the company addresses these concerns promptly and resolves the issues faced by consumers,” she said.
Ola Electric’s stock took a hit following the news, dropping nearly 9% on the day. The company's shares have been volatile since their August 2024 debut, with recent market performance reflecting broader concerns around service quality and customer satisfaction. The company has yet to issue a formal public comment beyond its exchange filing.