Ola’s February Sales Include E-Motorbikes That Haven’t Even Launched Yet
Ola Electric Mobility is under fire for its recent sales reporting, which included unlaunched electric motorcycles and e-scooters in its February figures. The company, backed by SoftBank Group Corp, reported over 25,000 units sold, but official vehicle registrations only accounted for about 8,600. This discrepancy has raised concerns among regulators and investors as Ola attempts to regain their confidence.
Discrepancies in Sales Reporting
In a letter to India’s Ministry of Road Transport and Highways dated March 21, Ola Electric disclosed that it had included bookings for 10,866 third-generation e-scooters and 1,395 Roadster X motorcycles in its February sales figures. These bookings represented nearly 50 percent of the total 25,207 “confirmed orders” reported for the month. However, the Roadster motorcycles have yet to be launched, and deliveries for the third-generation scooters only began in March. Ola’s February sales announcement initially claimed more than 25,000 units sold, but a government portal indicated that only 8,600 units had been registered. This significant gap prompted the ministry to request clarification on the sales figures. Ola attributed the discrepancy to ongoing negotiations with vendors that may have delayed vehicle registrations. In response, the company provided details on customer bookings but did not clarify whether these orders had been invoiced or delivered.
Regulatory Challenges Ahead
While Ola Electric has not been formally accused of wrongdoing, the ministry’s inquiries highlight the regulatory challenges the company faces. The ministry has requested that Ola revise its sales figures to reflect only those vehicles that have been invoiced. The company has been under increasing scrutiny, having previously faced warnings from India’s market regulator and notices from the Central Consumer Protection Authority regarding alleged violations of customer rights and misleading advertisements. An Ola spokesperson stated that sales figures were based on full payments received from customers, emphasizing that revenue is recognized only upon the completion of vehicle registration and delivery. The spokesperson also noted that the company is actively addressing the ministry’s queries. However, the road transport ministry has not yet responded to requests for comment on the situation.
Impact on Investor Confidence
The discrepancies in Ola’s sales reporting come at a time when the company is already grappling with multiple crises. Following a successful initial public offering in August, Ola’s shares have plummeted by over 60 percent amid regulatory challenges and operational issues. The company has faced raids and vehicle seizures from state transport officials due to non-compliance with trade certificate requirements, further complicating its efforts to restore investor confidence. In December, Ola expanded its network by adding 3,200 showrooms and service centers to address customer concerns. However, the ongoing regulatory scrutiny and the recent sales reporting issues have cast a shadow over the company’s future. As Ola navigates these challenges, it remains to be seen how it will adapt to the evolving regulatory landscape and regain the trust of both investors and consumers.
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