Majority of Ola Electric Stores Lack Trade Certificates, Facing Raids: Report

Ola Electric Mobility’s aggressive expansion into brick-and-mortar showrooms has hit a major regulatory roadblock, with a Bloomberg News investigation revealing that over 95% of its stores lack the mandatory trade certificates required under India’s Motor Vehicles Act.

Of the approximately 3,400 showrooms for which data is available, only around 100 locations possessed the trade certificates necessary to legally display, sell, or offer test rides on unregistered two-wheelers. In response to customer complaints, transport authorities across multiple Indian states have raided stores, seized vehicles, and issued show-cause notices to the company, according to internal government documents cited in the report.

Regulatory Scrutiny and Ola’s Response

As per India’s Motor Vehicles Act, all automobile showrooms must display a valid trade certificate if they keep unregistered vehicles on-site. Hans Kumar, a retired assistant transport commissioner from Rajasthan, confirmed that this rule applies to two-wheeler dealerships as well.

Ola, in an emailed response, rejected claims of non-compliance, calling them “misplaced and prejudiced.” The company stated that its inventory of unregistered vehicles is kept in distribution centers and warehouses, which are fully compliant with the Act. However, Ola did not directly address whether its showrooms had trade certificates or if it had faced raids and vehicle seizures.

Despite ongoing investigations by local transport officials, the company has continued its rapid store expansion. In December 2024, Ola launched over 3,200 new locations overnight, most of which, according to government documents, do not have trade certificates. The company had previously informed transport authorities that its experience centers were for “customer engagement” rather than direct sales, but regulatory probes have persisted.

Ola’s Struggles Amid Expansion and Compliance Issues

Ola Electric, once India’s top electric scooter maker, is facing a series of financial and operational crises. Its shares have plunged over 60% since its public listing in August 2024, amid quality complaints, service issues, and rising competition from Bajaj Auto and TVS Motor.

The regulatory challenges come at a time when Ola is also dealing with layoffs of over a thousand employees and contract workers. Additionally, the company’s highly anticipated e-motorcycle launch has been delayed, despite CEO Bhavish Aggarwal’s earlier promise of a January 2025 rollout.

Red Flags in Vehicle Sales Reporting

A further concern has emerged regarding Ola’s vehicle sales reporting. While the company reported selling over 25,000 scooters in February 2025, government data from the VAHAN portal shows that only 8,600 vehicles were registered. Indian law prohibits the delivery of unregistered vehicles, raising potential legal risks for Ola.

The company, in a February 28 exchange filing, stated that registration numbers for February sales would be updated in the “next few weeks,” citing ongoing negotiations with vehicle registration agencies. However, experts warn that failure to register invoiced vehicles within the mandated seven-day window could put Ola at odds with state government laws.

What Lies Ahead for Ola Electric?

Despite its challenges, Bhavish Aggarwal remains optimistic, stating in a recent earnings call that Ola expects to achieve profitability (EBITDA breakeven) at 50,000 monthly sales. He expressed confidence that the company could reach this milestone in the next few quarters.

However, with increasing government scrutiny, falling market share, and store-level regulatory non-compliance, Ola Electric faces a difficult road ahead. The company will need to navigate both financial pressures and mounting regulatory concerns to sustain its ambitious expansion in India’s competitive EV market.

Sources By Agencies

About The Author