Inside the Battle Between Registration Agencies and Ola Electric

Fresh questions about Ola Electric's approach were raised when a confrontation with vendors, delayed deliveries, and a INR 3,000 crore market rout resulted from an attempt to lower registration fees. Customers who were excitedly anticipating their Ola Electric scooters started to notice an unanticipated delay last month. The typical turnaround time was one week, but delivery took almost a month. Social media was flooded with complaints, and store managers had few responses. A dispute over payments between Ola Electric and its registration agency was at the centre of the disturbance. In addition to frustrating customers and depleting investor wealth by about INR 3,000 crore, the issue halted scooter delivery. The administration has also taken notice of the impact. According to media sources, the dispute has already cost the corporation a top executive, General Legal Counsel Rohit Kumar, who departed due to disagreements over the way the matter was handled. Since its August 2024 stock market debut, this is one of Ola Electric Mobility Ltd's largest obstacles. After talking to seven executives who were aware of the situation, Mint puts the whole disagreement with the registration agency together.

The Starting Point of Dispute

A disagreement between Ola Electric and Shimnit India Pvt. Ltd. and Rosmerta Digital Services Ltd., two of India's biggest car registration companies, was the beginning of the issue. Since December 2021, the authorities have collaborated with Ola to process vehicle registrations, issuing licence plates and entering client information into the government database. It was a good arrangement for over two years. However, Ola Electric's sales began to decline by the middle of 2024. Although the company never again reached that milestone, it did reach a peak of 50,000 units in March of last year. People with knowledge of the situation claim that Ola Electric was paying INR 1,400–1,600 for each car for registration, a price determined by the anticipated volume of sales. Ola pressed for severe reductions as part of a larger cost-cutting initiative that was started in November 2024, but the agencies objected, claiming that reduced sales volumes meant greater expenses per unit for them.

Network Transformation and Opex Reduction Programme

Ola announced that it had started a Network Transformation and Opex Reduction Program in a statement on March 12. According to the statement, this programme has included projects to alter the distribution network, such as automating registration and shipping vehicles, spare parts, and accessories straight from the plant to retail locations, as well as closing all regional warehouses. According to the corporation, the implementation of this approach has resulted in monthly savings of approximately INR 90 crore. According to media reports, a senior official who is no longer at Ola Electric stated that the company has occasionally been dissatisfied with Rosmerta's performance. According to media reports, there were occasionally delays that harmed the clientele's interaction with the business. The corporation decided to stop cooperating with these organisations after determining that the registration procedure could be completed internally.