Ola’s 90% outlets to be shuttered in India’s top electric scooter-selling state

In a 3 July letter, the Maharashtra transport department informed the office of the state’s transport minister that regional authorities have taken action against those stores which did not have the required trade certificate. Mint has reviewed a copy of the letter.

Trade certificates are a regulatory requirement to keep unregistered vehicles in the showroom and facilitate sales. The state’s move marks another setback for the company that grappled with a lack of service infrastructure and then disruption in registrations. Once the largest seller of electric scooters, it has now slipped to third place behind TVS Co. and Bajaj Auto Ltd.

Maharashtra recorded sales of 212,000 electric two-wheelers in the fiscal ended 31 March, making it the largest electric scooter market in the country. It accounted for about 12% of Ola Electric’s over 344,000 scooter sales last financial year.

“In checking all showrooms with a local speedy investigation team, it was found that 44 out of 432 showrooms (which were inspected) have trade certificates, and 388 showrooms without trade certificates have been shut down,” the Maharashtra transport department’s letter read.

In an emailed response to Mint’s queries, the company said, “Your claims regarding our stores in Maharashtra are speculative, incorrect and misplaced…Having said that, we continue to work closely with the concerned authorities in Maharashtra to address any specific queries or concerns.”

The company did not specify the queries or concerns it is addressing. Emailed queries to the Maharashtra transport department remained unanswered, while the state’s transport commissioner and joint transport commissioner did not respond to text messages.

Mounting troubles

Ola Electric has 4,436 stores in the country, of which 3,365 are owned and operated by the company. It follows a direct-to-consumer model. Buyers can purchase directly from the company’s app, while the outlets facilitate sales and manage test rides. Consumers can also opt for direct home delivery of vehicles even without going to a store.

Troubles continue to mount despite managing director and chairperson Bhavish Aggarwal’s claim that regulatory issues were behind the company.

“Q4 had a bunch of these issues around regulatory things. Now, those are now behind us. [For] the network expansion, we had to have trade certificates in some areas. We are now fully in touch with all agencies, all state-level RTOs to make sure we are either compliant or have already filed for the compliance of whatever we need,” he had said.

On 21 April,Mintreported that the transport department had decided to shut 121 stores and issue show-cause notices to 270 more. Vivek Bhimanwar, transport commissioner of Maharashtra, had said on 21 April, “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 an additional 270 stores.”

Sales vs registration mismatch

The regulatory scrutiny of Ola Electric’s stores increased after the company informed the exchanges in February that it was facing disruption in its registration process. This also caused a discrepancy, with total sales reported at 25,000 against 8,500 actual registrations.

The trouble with the sales network comes at a time when the company is looking to claw back lost market share. In June, Ola Electric sold 20,120 battery-powered scooters and bikes, according to data on the Vahan portal (excluding Telangana data). TVS sold 25,407 and Bajaj Auto sold 23,119 electric two-wheelers.

The management indicated during the earnings call for January-March that to achieve operational profitability, it needs to sell 25,000 scooters every month.

Investors have continued to sell the company’s stock this year as its share price has plunged 53% so far against a 1.5% rise in Nifty Auto.

“The company’s declining market share raises concerns about product quality and execution. In Q1FY26, Ola sold ~60,500 vehicles, with its market share falling to 19.6% from 33.4% a year earlier,” said Saji John, senior research analyst atGeojit Financial Services.

“In contrast, TVS, Bajaj, and Ather gained market share, reaching 25%, 21.5%, and 13.7%, respectively, indicating stronger stability and growth,” John said. “While the near-term outlook for Ola remains subdued, a broader market recovery could support a rebound in its stock, driven by efforts to reduce losses and stabilise market share.”

Ola Electric will announce its results for the first quarter ended June on Monday.