Govt orders audit of Ola Electric service centres after 10,000 consumer complaints: Report

The Ministry of Heavy Industries has called for an audit of Ola Electric's service centres for delayed and unsatisfactory after-sales service and inaccurate invoices, Reuters reported citing a source and official document on October 10.

The move will increase pressure on the electric vehicle (EV) maker, which is already under government scrutiny due to 10,000 complaints against the company, it added.

Ola's shares tanked 40 per cent this week following a stellar market debut in August. The biggest hit came after Ola founder and CEO Bhavish Aggarwal engaged in a social media spat with comedian Kunal Kamra for complaining about Ola's e-scooters.

Audit to Ensure Eligibility for Govenment Incentives

The report added that the audit seeks to ensure that Ola is maintaining its service centres and honouring the warranty given to consumers. These are conditions it must meet to be eligible for incentives under the government's EV promotion scheme, the source told Reuters.

The Ministry's testing and certification agency Automotive Research Association of India (ARAI), will conduct the audit and the next course of action will follow once this is complete, the source added, as per the report.

Ola, the Ministry and ARAI did not immediately respond to queries, as per the report.

“Ola Electric is a beneficiary under the scheme whose eligibility certificate ... has been issued by ARAI. Therefore, you are requested to provide your comments,” the ministry said in a letter to ARAI.

If found to be in violation, Ola's eligibility to receive incentives under the government program could be affected, the source added.

Significant Backlogs

The Reuters report added that in a visit to 35 Ola centres in 10 Indian states last year they found many faced significant backlogs due to being under-staffed. At one centre, there were more than 100 scooters parked, many covered in bird droppings.

HSBC analysts said in a September note they visited multiple Ola service hubs and most “appeared overwhelmed by the service requests”.

(With inputs from Reuters)