Image Source - X
There are now reports that CCPA has observed Ola Electric and, on October 7, issued a show-cause notice to the electric vehicle maker on consumer rights, misleading advertisements, and unfair trade practices. This step has been taken amidst rising customer dissatisfaction with the working and service quality of Ola Electric scooters.
Ola Electric has been accorded 15 days to respond to the notice, company filing mentioned. The Company will respond to the Central Consumer Protection Authority within the given timeframe with the supporting documents
, said Ola Electric CFO Harish Abichandani.
Stock Takes a Hit
The news has resulted in Ola Electric's shares falling 9.1% to ₹89.14. It took its market capitalisation below $4.75 billion which is the lowest that has ended the company's streak since its IPO since August. Some of the main reasons for this include the mounting pressure placed on the service standards of the company.
Increasing consumer complaints about service
Ola Electric, after all, accounts for over 27% of Indian e-scooters. And this company reportedly gets over 80,000 customer complaints every month, Mint reported. A spat recently publicized between the CEO of Ola Electric Bhavish Aggarwal and comedian Kunal Kamra on service quality only added further attention to the failures of the company in question.
In response, Aggarwal wrote to Kamra on X: "Sit quiet. They will resolve the service issues." The online exchange stirred up much frustration from Ola users on social media, further denting the brand's reputation.
Image Source - X
Service Centers Under Pressure
HSBC analysts have reported a number of Ola service stations are unable to cope with the humongous number of services. This is a common compliant from Ola customers on lack of proper service.
The most critical incident has also come from Karnataka recently. An irate customer went on to burn seven e-scooters at an Ola Electric showroom after his complaint of a defective scooter was turned away.
The Road Ahead
It remains to be seen whether the company's response to this CCPA notice will be its turn of fortunes and help it sail through the choppy waters. Indeed, its capacity to address customer grievances and improve service quality will be the decisiveness of its future trajectory as the EV market is rapidly expanding in India.
With inputs from agencies
Image Source: Multiple agencies
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