Bengaluru: Ola Electric Mobility’s rapid expansion into physical showrooms is facing regulatory challenges, with authorities investigating alleged violations of India’s Motor Vehicles Act. The Bengaluru-based electric scooter company, which once focused on a digital-only sales model, has scaled up to 4,000 brick-and-mortar locations since 2022. However, a Bloomberg News investigation found that out of approximately 3,400 showrooms for which data is available, only a little over 100 had the mandatory trade certificates required to display, sell, and offer test rides on unregistered two-wheelers.
Regulatory Raids and Showroom Closures
Due to customer complaints, transport authorities across multiple states have conducted raids, closed showrooms, seized vehicles, and issued show-cause notices to the Bhavish Aggarwal-led firm. Internal documents and government warning letters indicate that at least six local transport departments are investigating Ola’s alleged non-compliance.
Ola, however, denied any wrongdoing in an emailed response, stating that its unregistered vehicle inventory is stored at distribution centers and warehouses that comply with regulations. The company did not address whether its showrooms had the required trade certificates or acknowledge the reported raids and seizures.
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Mounting Challenges for Ola
Ola, once India’s leading electric scooter manufacturer, is facing multiple crises:
- Its shares have plunged over 60% since its August listing.
- The company is battling quality and service complaints from buyers.
- It has laid off over 1,000 employees and contract workers as part of cost-cutting measures.
- Its much-anticipated e-motorcycle launch has been delayed, despite previous announcements of a January rollout.
Scrutiny Over Sales and Vehicle Registrations
According to nearly two dozen state transport notices, officials have frequently found Ola failing to meet the trade certificate requirement at store level. The first official warning dates back to 2023, with fresh notices issued in March 2025. In response to state transport department actions, Ola sporadically applied for and obtained trade certificates in certain locations.
In February 2025, Ola announced it had sold over 25,000 vehicles, but the government’s VAHAN database showed only 8,600 registrations. This significant discrepancy raises concerns, as Indian law prohibits the delivery of unregistered vehicles to customers. Ola acknowledged the delay, stating that the remaining registrations would be updated in the coming weeks.
Market Competition and Future Outlook
Ola’s challenges come as legacy manufacturers Bajaj Auto and TVS Motor Co. gain market share, surpassing Ola in India’s two-wheeler EV segment. Despite this, CEO Bhavish Aggarwal remains optimistic, stating in a February 7 earnings call that the company expects to achieve EBITDA breakeven once it reaches 50,000 monthly sales.
With ongoing regulatory scrutiny, compliance issues, and financial pressures, Ola’s road to recovery remains uncertain.