New Delhi: Ola Electric Mobility Ltd stands to lose out on government subsidies for electric vehicles if it fails to register more than 16,000 two-wheelers sold in February by the end of this financial year. The benefit can be claimed by the automaker only after the vehicle is registered, according to the guidelines of the scheme.
The company informed the stock exchanges last month that its vehicle sales for February would not be accurately reflected on Vahan, the government website that tracks daily new vehicle registrations, because it was renegotiating contracts with registration service providers.
Since then, there’s been no update from the company on whether the renegotiations have concluded and one of the registration agencies has taken the company to bankruptcy court.
Ola Electric registered 8,651 electric two-wheelers in February, according to data on Vahan. That’s just over a third of the over 25,000 units that the company said it sold in February, a shortfall that could halve the benefits it gets for each two-wheeler sold under the government’s flagship EV subsidy scheme if their registration isn’t completed by the end of March.
The company “sold more than 25,000 units in February with a market share of over 28%,” Ola Electric said in a press release dated 28 February. Ola Electric sold each scooter at a ₹10,000 discount to avail of the subsidy.
If the company fails to register all its February sales in the two weeks left for FY25, it may stand to lose as much as ₹5,000 for every vehicle sold during the renegotiations with the registration agencies.
Registration is key
Under the ₹10,900-crore PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, vehicle makers have to sell their products at a discounted or subsidised price and the government reimburses them for the difference.
The scheme, launched in October 2024, is set to run till the end of FY26. For electric two-wheelers sold and registered in FY25, automakers will get a maximum subsidy of ₹10,000 per unit. The incentive is set to be halved to ₹5,000 per vehicle in FY26, as per the scheme notification.
Ola registered 24,380 electric two-wheelers in January and 8,230 units so far in March. While a company may record a sale once a customer pays for an EV, it becomes eligible for the subsidy only after the vehicle is registered as per the Central Motor Vehicle Rules, 1989.
An emailed query to Ola Electric on 16 March and a follow-up reminder on WhatsApp on 17 March did not elicit a response from the company.
Ola Electric is currently renegotiating contracts with its two registration service providers, a person with direct knowledge of the matter in the company told Mint, requesting anonymity. The person said the company is speeding up its registrations, but did not reveal how Ola Electric intends to achieve its target.
The renegotiations resulted in prolonged delays in the deliveries of Ola Electric scooters, according to store managers and complaints posted by buyers on social media, Mint reported on 14 March, with the waiting period stretching to 20-45 days from 5-7 days before February.
The company informed the stock exchanges on 12 March that it has completed an initiative aimed at reducing costs and improving customer experience.
“In addition to cost savings, these changes have resulted in reducing average vehicle inventory from approximately 35 to 20 days, and reducing delivery time for customers from 12 days to 3-4 days,” Ola Electric said in the exchange filing.
Legal action
Within a month of Ola Electric alerting the stock exchanges about its renegotiations with vehicle registration service providers Rosmerta Digital Services Pvt Ltd and Shimnit India Pvt Ltd on 19 February, the two-wheeler maker faced legal action from one of the agencies.
Rosmerta Digital Services has filed an insolvency plea against Ola Electric over unpaid dues with the Bengaluru bench of the National Company Law Tribunal, as per a stock exchange filing dated 15 March, indicating that the company’s registration woes are far from resolved.
As per the PM E-DRIVE scheme’s guidelines, automakers can submit weekly claims for reimbursement of subsidies, but not later than 120 days from the sale of the vehicle.