Ola Electric, once a dominant player in India's electric two-wheeler market, is facing fresh controversy. Authorities have conducted raids on Ola Electric showrooms across the country, citing violations of the Motor Vehicles Act (MVA). The investigation revealed that out of 3,400 Ola showrooms, only around 100 had the required trade certificates displayed, raising concerns about regulatory compliance.

Ola Electric Under Investigation for Violating MVA Rules

Under the Motor Vehicles Act (MVA), all automobile showrooms are required to display a valid trade certificate. This certificate permits dealers to showcase, test, and transport unregistered vehicles. However, a recent investigation found that over 95% of Ola Electric showrooms lacked this crucial certification. This violation led to state transport department raids, seizures of unregistered vehicles, and store closures.

Following these findings, a show-cause notice was issued to Ola Electric. The Bengaluru-based company, led by Bhavish Aggarwal, has been instructed to clarify its compliance status.

Ola Electric’s Response: Denial and Damage Control

In response to the allegations, Ola Electric dismissed the claims, stating that reports of non-compliance are ‘misplaced’ and ‘prejudiced.’ The company asserted that it maintains proper inventory records and operates within legal boundaries. Ola also emphasized that it possesses all necessary approvals and adheres to the Motor Vehicles Act.

However, this is not the first time the company has come under regulatory scrutiny. Ola Electric received its first warning from transport authorities back in 2023, followed by nearly two dozen notices from various state officials. Despite these warnings, the issue resurfaced in March 2025, prompting further investigations and enforcement actions.

The Bigger Picture: Ola Electric's Declining Market Position

Once a leader in the electric scooter market, Ola Electric has been struggling with declining sales, customer complaints, and service issues. The latest controversy only adds to its challenges.

This regulatory crackdown also comes at a critical time for the company. Shortly after the raids, Ola Electric’s stock took a major hit, plunging below ₹50 per share—its lowest level since going public. This sharp decline reflects growing investor concerns about the company’s long-term sustainability.

With authorities tightening regulations and competitors gaining ground, Ola Electric faces a tough road ahead. The company must address compliance issues, rebuild customer trust, and improve operational efficiency if it hopes to regain lost momentum.

Final Thoughts

Ola Electric’s troubles highlight the importance of regulatory compliance in the growing EV sector. As India pushes for faster EV adoption, companies must ensure they follow all necessary legal frameworks to avoid setbacks. Whether Ola can navigate this crisis and restore its reputation remains to be seen.