India's heavy industries ministry has ordered an audit of Ola Electric's service centres, ratcheting up pressure on the e-scooter maker which is already under government scrutiny after a slew of consumer complaints, according to a source and an official directive.
Earlier this week, Ola received a notice from India's consumer protection agency following 10,000 complaints against the company over issues such as delayed and unsatisfactory after-sales services and inaccurate invoices.
Shares in India's biggest e-scooter maker have fallen around 40% in recent weeks, taking the shine out of its stellar market debut in August, as sales have dipped with angry customers taking to social media to complain about its after-sales service.
The audit by the industries ministry has been ordered to ensure Ola is maintaining its service centres and honouring the warranty given to consumers - conditions it must meet to be eligible for incentives under a government program to promote electric vehicles, according to the source with direct knowledge of the government directive.
The Automotive Research Association of India (ARAI), a testing and certification agency under the industries ministry, has been asked to conduct the audit after which the government will decide the next course of action, the person said.
"Ola Electric is a beneficiary under the scheme whose eligibility certificate ... has been issued by ARAI. Therefore, you are requested to provide your comments," the ministry said in a letter to ARAI.
If found to be in violation, Ola's eligibility to receive incentives under the government program could be affected, the person said.
Softbank Group-backed Ola, which has a 27% market share in India's e-scooter market, did not respond to a request for comment.
India's industries ministry and ARAI did not immediately respond to a request for comment.
Reuters last year visited 35 Ola centres in 10 Indian states and found many faced significant backlogs, with demand outstripping their workforce. At one centre, there were more than 100 scooters parked, many covered in bird droppings.
HSBC analysts said in a September note they visited multiple Ola service hubs and most "appeared overwhelmed by the service requests".
Ola has also been in the spotlight this week following a public spat between its founder and a comedian which revived questions over its service and prompted another wave of complaints online.