Ola Electric confirms getting queries from govt; attributes low sales data to 'temporary backlog'
The statement from Ola Electric comes after reports of the company facing regulatory scrutiny over differences in its reported sales numbers for February and actual vehicle registrations on the Vahan portal.
Ola Electric has received inquiries from the Ministry of Heavy Industries (MHI) and the Ministry of Road Transport and Highways of India (MORTH) over discrepancies in sales data and non-compliance with trade requirement certificates, the company said in a stock exchange filing on Friday.
The company also said it is in the process of responding to the emails from MHI and MORTH.
However, Ola Electric said there are no ongoing regulatory or legal proceedings, further clarifying that the sales data mismatch was due to a "temporary registration backlog."
Shares of the EV maker was trading up 5.6% at Rs 54.52 as of 10:19 AM IST on Friday.
On February 28, the company, in a press release, said that it had sold 25,000 units during the month, retaining its market lead in the two-wheeler EV ecosystem. However, numbers on Vahan, the national vehicle registry system, showed that it had sold only 8,600 units.
Back then, Ola Electric had said that the company was renegotiating contracts with its vehicle registration agencies, namely Rosmerta Digital Services Private Ltd and Shimnit India Private Ltd. As a result of these negotiations, while actual sales will not be impacted, registration numbers showing on the government’s Vahan portal may see a temporary dip.
Earlier this week, a report by CNBC-TV18, citing sources, said the MHI was investigating the discrepancies between Ola Electric’s reported sales and actual vehicle registrations.
According to the report, this difference has come under scrutiny. In a copy of the order issued by the Maharastra Transport Authorities, reviewed by the news agency, Maharashtra RTO authorities had carried out inspections at multiple Ola showrooms across the state.
The report also notes that, as a result of these ongoing inspections, 36 scooters were seized in Mumbai and Pune due to compliance issues.
Bhavish Aggarwal-led Ola Electric responded to these reports saying the temporary registration backlog was misinterpreted as a regulatory issue.
Ola Electric further added that the temporary backlog in February is being “rapidly cleared” with daily registrations exceeding 50% of its three-month daily sales average; 40% of this backlog has already been cleared and the remaining will be resolved by March.
“This is a straightforward case of a temporary registration backlog, yet certain media outlets and vested interests have deliberately misrepresented it as a regulatory issue through misinformation and smear campaigns. This intensified after we discontinued contracts with two nationwide vendors managing our registration process as part of our strategy to streamline operations and drive profitability.”
The vendors being referred to are Rosmerta Digital Services and Shimnit India. Notably, Rosmerta has filed an insolvency petition against Ola Electric Technologies.
The company has disputed these claims and said that it has sought appropriate legal advice to protect its interests and challenge these allegations.
Amidst widening losses, the company has undertaken a cost-cutting and efficiency drive as it targets to achieve profitability in the next fiscal. It has shut down all regional warehouses, reportedly let go of about 1000 employees, and streamlines its sales and service network.
Ola Electric has also confirmed that it has received notices from four states with regard to trade certificates for a few of its stores in these states and is in the process of responding to them.
(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director at Ola Electric.)
Edited by Nikhil Patwardhan and Swetha Kannan