The CCPA Has Issued a Show Cause Notice to Ola Electric Due to Deceptive Advertising

Nitin Konde

Oct 8, 2024 — 2 min read

The CCPA Has Issued a Show Cause Notice to Ola Electric Due to Deceptive Advertising

Following the Central Consumer Protection Authority's (CCPA) show-cause notice to the business on 7 September 2024, shares of newly listed Ola Electric Mobility dropped 6.17 percent in intraday trading to INR 85.21 on 8 September 2024.

In an exchange filing, Ola said that the CCPA has given the company 15 days to reply to the show-cause notice. The business promised to reply to the notification and provide the necessary documentation within the allotted period.

The CCPA has issued a show-cause notice for suspected unfair trading practices, deceptive advertising, and violations of consumer rights. The company will respond to the CCPA's show cause notice. At the moment, the Show Cause Notice has no bearing on the business's operations, finances, or other activities. Additionally, the management of the company stated in an exchange filing that the notice did not impose any penalties or monetary fines.

One of India's leading EV companies, Ola Electric, is committed to building vertically integrated technology and production capacity for EVs and their parts, such as battery cells. At the Ola Future Factory, it manufactures EVs as well as necessary parts like motors, battery packs, and vehicle chassis.

Company’s Recent Market Performance

The Indian electric two-wheeler company recorded its lowest monthly sales of the year in September as its dominance faded due to new competition from smaller firms and issues with the servicing network. In September 2024, Ola Electric sold 23,965 units, marking the second consecutive month that the company's month-over-month (M-o-M) sales have decreased. According to research, its market share dropped from above 50% in April to 27% in September for five consecutive months due to its declining M-o-M sales.

Bajaj Auto and TVS Motor both reported increases in their market shares for five consecutive months during this time, closing the sales gap.

Ola's declining sales and frequently undercutting prices present additional difficulties for the business's financial performance. It hasn't made any money yet.

Kamra and Aggarwal Locking Horns on X

Now, the issue has gone to X, where stand-up comedian Kunal Kamra has questioned Ola's service by using a tweet from Ola CEO Bhavish Aggarwal that included an image of the Ola Gigafactory.

In the tweet, Kamra asked if Indian customers had a voice. Are they deserving of this? Is this how Indians will adopt EVs? Two-wheelers are the livelihood of many daily wage labourers. If you have a problem with OLA Electric, please share your tale here, tagging everyone. The result was a prolonged verbal sparring match between comedian Kunal Kamra and Ola CEO Bhavish Aggarwal. Kamra didn't stop here; he went further and tagged Nitin Gadkari, Union Minister for Road Transport & Highways, Government of India, in the tweet.