Ola Electric, facing increased regulatory scrutiny over its recent BOSS sale discounts, has clarified its position in a formal response to the Bombay Stock Exchange (BSE)
Ola Electric share price has seen a massive drop recently, raising concerns regarding its pricing strategy, particularly for the S1 X 2kWh model. From a peak of Rs 157 in August, Ola Electric share price was at Rs 87.46 at the end of trading day on 14th October.
Ola Electric ‘BOSS’ Discounts
Following reduced sales and complaints of flawed after sales service, Ola Electric is now resorting to the ‘BOSS’ offer to cash in on festive buying. The S1 X 2kWh model is being presented at Rs 49,999 which is lower than the ex-factory price. This according to ARAI was done without them being informed in advance.
ARAI has hence asked Ola Electric to offer more clarity on this significantly reduced pricing. Failure to give any satisfactory reasons, the company could lose the subsidies which are being offered under PM Electric DRIVE Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme, which recently replaced FAME-II. The company also faces strong action in terms of widespread consumer complaints, compounding this issue even further.
Called BOSS (Biggest Ola Season Sale), the Ola Electric S1 X 2kWh model is being offered at Rs 49,999. This is a Rs 25,000 discount on actual pricing of Rs 75,001. Failure to inform ARAI about this new pricing policy prior to announcing the ‘BOSS’ promotional scheme is what has resulted in this questioning.
ARAI now seeks clarity on this new price reduction and Ola Electric could face lawsuits if found guilty of violating regulatory guidelines. Ola Electric could also face the risk of losing financial benefits under the new subsidy scheme while Ministry of Heavy Industries (MHI) has also asked ARAI to confirm if Ola Electric is conforming to warranty terms and conditions and maintenance of service centers.
Ola Electric’s Clarification
Ola Electric has now provided clarification on the issue following inquiries from the Automotive Research Association of India (ARAI). Ola Electric received an email from ARAI on October 8, 2024, seeking confirmation about whether the S1 X 2kWh was being sold at the discounted price of Rs 49,999. In response, Ola Electric clarified that:
The company has not permanently changed the price of the S1 X 2kWh model. The reduced price is part of a limited-time festive campaign, offering a general discount of Rs 5,000 to all customers, while a Rs 25,000 discount was applied only to select customers with limited inventory available.
Supporting documents, including an invoice dated October 6, 2024, and a screenshot from their app, were provided to ARAI as evidence of this selective pricing. Additionally, Ola Electric noted that they had promptly supplied further documentation upon request from ARAI on October 9, 2024. To date, they have not received any further communication from the regulatory body.
Addressing Stock Price Volatility
Ola Electric also addressed the recent movement in its share price, clarifying that they are not aware of any undisclosed information that could explain the fluctuation. The company assured that all material events and information required under SEBI’s Listing Obligations and Disclosure Requirements have been duly disclosed to the relevant stock exchanges. Ola emphasized that the media report on the regulatory scrutiny has had no material impact on the company’s overall operations or financial health.
Ola Electric Fall from Glory – Piling Complaints, Lawsuits, Falling Share Price
Ola Electric, even as it is currently the top selling electric 2W maker in India, with a 27% market share as of September 2024 ended the month in the red. The company reported a 10.31% MoM de-growth. Sales fell to 24,679 units in the past month with competitors Bajaj, TVS and Ather all witnessing increased demand.
Sales of Ola Electric have been fast dwindling as consumer issues mount. A series of complaints pour in with regard to deliveries substandard performance, service delays, documentation and mileage issues etc., with the National Consumer Helpline portal receiving nearly 10,000+ complaints to date. The complaints which pile in have even termed Ola service centers as ‘graveyards of electric scooters’ on social media. CCPA has also sought a response from Ola Electric within 15 days.
Following these concerns and falling of share price to Rs 87.34, down 44.48% from a record high of Rs 157.53, on August 20, 2024, Ola Electric has promised stringent measures. Among these remedial measures are expansion of service networks by the end of this calendar year. AI relation maintenance program with Move OS 5 and augmented training to service personnel along with Hyper Service facilities and 1 day fix are also some of these measures being adopted.
