The joint transport commissioner of Maharashtra has asked local transport authorities to close all 121 stores operating without trade certificates. Mint has reviewed a copy of the letter sent to the local authorities. In fact, the state’s transport commissioner confirmed to Mint that 270 more Ola Electric stores will be issued show-cause notices.
As per the letter, 75 of these 121 stores have already been closed and the local authorities have been asked to close the remainder.
In the letter dated 16 April, the joint transport commissioner wrote, “If the showroom or store cum service center of the company M/s Ola Electric Mobility Limited in your area of operation is doing business without obtaining a trade certificate from the transport office, action should be taken to close that center or showroom.”
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To be sure, Maharashtra recorded 212,000 sales of electric two-wheelers in financial year ended 31 March, making it the largest electric two-wheeler market in the country.
In fiscal year 2025 (FY25), Ola Electric sold a total of 344,000 electric two-wheelers, according to the government’s Vahan portal, which is a centralized vehicle registry database. Out of these, 40,303 units, or about 12% of its total scooters, were sold in Maharashtra.
When contacted, an Ola spokesperson said, “Your claims regarding our stores in Maharashtra are speculative, incorrect and misplaced.”
However, the state transport department confirmed the developments to Mint. Vivek Bhimanwar, transport commissioner of Maharashtra, said, “We have closed about 75 stores and a total of 121 stores have been found operating without trade certificates. Moreover, our department is sending show cause notices to additional 270 stores.”
The Ola spokesperson added, “We continue to work closely with the concerned authorities in Maharashtra to address any specific queries or concerns.”
The local authorities have conducted several raids across the state during which they seized a total 192 vehicles, as per the joint transport commissioner’s letter cited earlier.
The regulatory action comes amid inquiries by the Union ministry of road transport and highways, and the ministry of heavy industries. The government has inquired about noncompliance with trade certificates, Ola Electric said in an exchange filing.
Maharashtra saga
On 31 March, a letter was sent to Ola Electric by the joint transport commissioner of Maharashtra, asking for the company’s response to a complaint that it was operating some of the stores without necessary documents.
The letter said the state authorities conducted a special drive to inspect Ola stores across the regional transport offices (RTOs) of Mumbai, Borivali and Pune.
“During the action taken by these RTO offices, it was found that unauthorised showrooms and stores cum service centers were being operated and vehicles without proper registration were being kept for sale,” the letter said.
The company was asked to provide an explanation within three days.
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Ola Electric replied on 5 April that the company followed a unique direct to consumer business model in which it did not depend on dealers.
“Until a couple of months ago, we operated a model where our vehicles were stored regionally at state distribution centers (SDCs) which were spread through the country. These SDCs complied with all licenses including the trade certificates from the jurisdictional regional transport officers,” the company wrote in its reply.
The company said it decided to move away from the SDCs and keep the vehicles at the stores.
However, the latest development in the state suggests the authorities are still not satisfied with the level of compliance with the trade norms.
Ola Electric had said in its 5 April letter that the company has rapidly expanded its store network and is in the process of ensuring that “these stores have all the relevant licenses and approvals to operate, including the trade certificates from the jurisdictional RTOs.”
In an investor presentation released on 1 April, the company said it has 3,365 company-owned stores and 1,071 network partners, for a total of 4,436.
This latest regulatory action comes at a time when Ola Electric is facing tough competition from Bajaj Auto Ltd and TVS Motor Co. Ltd. Federation of Automobile Dealers Associations data in March showed Bajaj Auto leading in retail sales of electric two-wheelers, with TVS Motor in second place and Ola third. Ola led overall retail sales in FY25 with 344,009 units and a market share of 29.9%, down from its FY24 market share of 34.79%.
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In the firm’s earnings call on 7 February, Ola Electric founder Bhavish Aggarwal said, “We’ve also highlighted that given our gross margin expansion as well as operational cost control, we can expect auto segment Ebitda breakeven at about 50,000 monthly sales.”
Ebitda is short for earnings before interest, taxes, depreciation and amortisation.
As per Vahan data, the company sold about 23,500 vehicles in March.
Since the beginning of the year, Ola Electric’s share price has declined by more than 38% as against a 5% fall in Nifty Auto index.
Shashank Krishna Rao in Mumbai contributed to this story.
