The Central Consumer Protection Authority in India has issued a show-cause notice to Ola Electric, a leading electric vehicle maker, for allegedly violating consumer rights. This notice comes as Ola Electric faces mounting customer complaints regarding its scooters and service quality. The company has been given 15 days to respond to the allegations, which include concerns about misleading advertisements and unfair trade practices.
In a regulatory filing, Ola Electric’s CFO, Harish Abichandani, stated that the company will provide a response to the Central Consumer Protection Authority within the given timeframe along with supporting documents. This regulatory scrutiny has caused Ola Electric’s shares to drop by 9.1% on Monday, leading to a decrease in its market capitalization.
Recent reports have highlighted that Ola Electric service centers are overwhelmed by service requests and are struggling to maintain adequate service quality. Analysts from HSBC visited several service centers and noted a lack of investment in servicing capacity to match the high volumes of sales over the past two years. Issues such as sensor and software problems in the hub motor, battery discharge during non-usage, and staff shortages have contributed to customer dissatisfaction.
The lack of experience in the development and maintenance of service centers has resulted in a higher number of product issues than anticipated by the company. Ola Electric’s stock price has now dropped by more than 40% from its peak, indicating investor concern over the company’s ability to address customer complaints and improve service quality.
This regulatory action by the Central Consumer Protection Authority underscores the importance of upholding consumer rights in India’s rapidly growing electric vehicle market. Ola Electric will need to address these concerns promptly to regain investor confidence and ensure customer satisfaction in the future.
