Ola Electric has been facing the heat for the past few months. After drastic drops in sales figures, spiralling service issues and falling share prices, the latest challenge comes in the form of a show cause notice from the Central Consumer Protection Authority (CCPA).
This notice has been issued over nearly ten thousand customer complaints registered with the CCPA over multiple categories, including delays in providing service, delays in deliveries of new vehicles and promised services not being provided.
It is worth noting that the actual number of customer issues is likely to be vastly higher, with media reports stating that the company has received as many as 80,000 customer complaints in a month. With mounting product quality issues as well as social media buzzing with images of dusty scooters filling the parking spaces at Ola service centres, the company has witnessed a heavy drop in sales numbers.
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With less than 24,000 scooters sold in September, Ola’s market share has plummeted to 27 percent from a peak of nearly 50 percent a few months back. The company responded with a huge discount on its S1 scooters, with a starting price of just Rs 50,000. The effect of this discounting will be seen at the end of the month, but as of October 8, the company has sold 5,453 scooters, according to the VAHAN dashboard.
The company’s shares have also seen a sizeable fall in the past few days, with a 9 percent drop in their price after its founder engaged in a public spat with a comedian on social media. The show cause notice from CCPA is likely to have an impact as well.
In its acknowledgement letter to the BSE and NSE, the company states that it will respond to the notice within the stipulated 15-day timeline with supporting documents. Ola Electric also states, “the show cause notice currently has no impact on the financial, operational or other activities of the company.”
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