Shares of Ola Electric have stumbled significantly amid rising consumer complaints and controversy surrounding its CEO, Bhavish Aggarwal. Just recently, the Central Consumer Protection Authority (CCPA) issued a show-cause notice to the rising electric vehicle company, which has sparked outrage from both consumers and investors.
The notice, dated October 3, hints at numerous complaints—over 10,000 of them, to be exact—mainly centering around service delays, refund problems, and other consumer rights violations. Based on the findings from the National Consumer Helpline, which include complaints filed between September 2023 and August 2024, nearly one-third of these reports relate to delays in servicing e-scooters.
When the news hit, Ola Electric shares plummeted by as much as 10% during trading hours before settling down by 6% to approximately Rs 86. This marks a dramatic decline of over 43% from its all-time high of Rs 157.40, reached only days prior. Such fluctuations are leaving many to wonder about the stability of Ola Electric moving forward.
The CCPA’s formal notice includes accusations of the company’s involvement in unfair trade practices and service deficiencies—all serious claims under the Consumer Protection Act of 2019. Notably, the company has been instructed to respond within 15 days to the allegations, raising concerns among stakeholders about how it intends to navigate this storm. Meanwhile, Ola Electric assured the market it would comply with the requirement and provide necessary documentation without delay.
An overwhelming number of the complaints received by the National Consumer Helpline concern manufacturing defects, cancellations resulting in no refunds or partial refunds, and recurring issues with battery life, among others. With these numbers piling up, many consumers have taken to social media to voice their frustrations, sharing alarming anecdotes from their unsettling experiences with the company’s e-scooter.
Some users have shared gut-wrenching stories about service centers seemingly unequipped to resolve their concerns. One frustrated customer stated, "I delivered my scooter to Ola three weeks ago and got it back not properly fixed. I have to bear the costs for roadside assistance, and I totally regret purchasing this scooter." Another chimed, "The scooters are poorly engineered; users only got swayed by their sleek design. My updated model has no repairability—replacement is the only way forward for even minor issues. There’s nothing green about this process!"
This tumultuous situation escalated even more when Bhavish Aggarwal engaged with comedian Kunal Kamra on social media. What began as a light banter about the very issues customers were facing quickly transformed. Kamra’s tweet featured photographs of neglected Ola scooters just sitting, awaiting repairs. Aggarwal’s retort—branding Kamra’s humor as “paid content”—did not resonate well with the public, leading to greater backlash against the company.
To compound matters, Ola Electric's share price had already been fluctuated heavily due to these complaints and service quality issues. Aggarwal himself had recently defended his long work hours, going as far as to advocate for 70-hour workweeks—an assertion he made when discussing his company's operations and growth. Critics have expressed concern about how such comments reflect on the company’s operational policies.
Despite the CCPA’s heavy notice concerning consumer rights, Ola Electric expressed confidence stating, "This notice currently has no impact on our financial, operational, or other activities." Nevertheless, analysts within the electric vehicle market are keeping a close eye on both consumer reactions and investor sentiments as they advise caution for future investors drawn to the once-promising company.
Notably, Raghav N, founding partner of the automotive consulting firm MotorGram, commented, "Investors must recognize Ola Electric’s growing pains. While it was hailed as one of the newest contenders on the electric vehicle scene, these service issues risk undermining its brand reputation swiftly."
Looking forward, how the company handles this impending deadline with the CCPA, along with the active grievances from thousands of its customers, will be pivotal. Will they clear up their growing backlog and rebuild trust with consumers, or will they sink under the weight of rising expectations?
Shortly after the news of the CCPA notice broke, Ola Electric's stock performance began to fluctuate, leaving market analysts to delves deeply for insights on how the company approaches public relations and crisis management going forward. Public trust has taken quite the beating, and time will reveal whether Ola can weather this storm. If they fail to address consumer issues appropriately, it could be the end of the line for the company once seen as the harbinger of electric transportation revolution.
For now, the spotlight remains on Bhavish Aggarwal and the response of Ola Electric to not just regulatory demands, but the hard truths voiced by their consumers. Will the company pull through, brandishing their commitment to sustainable transport, or is this just the beginning of more troubles?
