ARAI Questions Ola Electric For Selling S1 X 2 kWh Scooter Below Ex-Factory Price

Ola Electric Mobility Ltd. has run into fresh trouble—this time over the pricing of its electric scooters during the ongoing festive season, at a time when India's largest electric two-wheeler is bleeding market share.

The government's Automotive Research Association of India, or ARAI, has sent an email to Ola Electric, seeking an explanation on how the company is retailing the Ola S1 X 2 kWh scooter at Rs 49,999, which is below the stated ex-factory price of Rs 75,001 to claim Rs 10,000 subsidy under the PM E-Drive scheme. 

“During PM E-Drive certification based on EMPS-2024, Ola has submitted declaration to ARAI that specifications, ex-factory price, etc., of this model are unchanged and based on this declaration, ARAI has issued PM E-Drive eligibility certificate with same amount of subsidy of Rs 10,000 for model Ola S1 X 2 kWh,” the email, dated Oct. 8, stated.

“We understand that this model Ola S1 X 2 kWh is being sold at Rs 49,999. This change in price will have an impact on subsidy eligibility for this model,” the email stated further. 

“As per operational guidelines of EMPS-2024 and PM E-Drive scheme, an OEM is required to inform change(s) in ex-factory price of the EV model, if any, subsequent to eligibility approval. In this particular case, Ola [Electric] has not informed ARAI about this change in price of model Ola S1 X 2 kWh.”

NDTV Profit has seen a copy of the email.

An email sent to Ola Electric remained unanswered, but people in the company indicated that the matter was resolved. The discounts were on limited inventory, there was no change in price, they said.

On 3 October, Ola Electric launched BOSS—or ‘Biggest Ola Season Sales'—that offered the S1 range of scooters at a starting price of Rs 49,999. The price includes a battery warranty of eight years or 80,000 km.

“BOSS is our biggest ever festive offering yet, as we continue with our mission to #EndICEAge and deepen penetration across the country,” billionaire founder Bhavish Aggarwal had said in a statement then. “With the biggest discounts, best deals, and attractive finance offers, this would be the perfect time for EVs to scale up and give ICE vehicles a run for their money.”

On Monday, Ola Electric claimed to have recorded retail sales of 15,672 units as on Oct. 14. That, according to the company, translated into a market share of 34%. Retail sales are calculated on the basis of vehicle registrations on the government's VAHAN portal. 

To be sure, the billionaire Aggarwal-led company has seen its sales decline to the lowest for the past couple of months. In September, total sales of the S1 maker fell 11% sequentially to 23,965 units, as against 26,928 in August—a monthly low in itself. In comparison, rivals Bajaj Auto Ltd., TVS Motor Co. Ltd. and Ather Energy Ltd. clocked growth and gained market share.

The slump in Ola Electric sales comes amid a service problem—scores of Ola S1 scooters were found languishing in what resembled a graveyard at its service centre in Thane, an NDTV Profit ground report found out. The company reacted immediately by launching its so-called HyperService in an endeavour for better customer experience.

That, however, didn't stall a showcause notice issued against it.

On 8 October, Ola Electric told the stock exchanges that the Central Consumer Protection Authority has issued to the company a showcause notice to explain the nearly 10,000 customer complaints in the past one year or so. The notice has no impact on the financial, operational or other activities of the company, Ola Electric said. It doesn't impose any penalty or financial fine either.

On Monday, Ola Electric shares fell 3.03% to Rs 87.46 apiece on the BSE even as the benchmark Sensex ended the day 0.73% higher at 81,973.05 points.