Inside Ola Electric’s showdown with registration agencies

At the heart of the disruption was a standoff between Ola Electric and its registration agencies over fees. The dispute stalled scooter deliveries, left customers frustrated, and wiped out nearly ₹3,000 crore in investor wealth. The fallout has also drawn government scrutiny.

Read this | Ola Electric’s scooter deliveries hit as it renegotiates contracts with vehicle registration agencies to cut costs

The controversy has already claimed a top executive—General Legal Counsel Rohit Kumar—who left the company amid tensions over how the situation was handled, according to two industry executives.

This marks one of the biggest challenges for Ola Electric Mobility Ltd since its stock market debut in August 2024.

Mint pieces together the story of the entire dispute with the registration agencies after speaking to seven executives aware of the developments.

What led to this?

The trouble started with a dispute between Ola Electric and two of India’s largest vehicle registration agencies—Rosmerta Digital Services Ltd and Shimnit India Pvt. Ltd.

The agencies had been working with Ola since December 2021, processing vehicle registrations by entering customer details into the government’s database and printing number plates.

For nearly two years, the arrangement worked smoothly. But by mid-2024, Ola Electric’s sales started slipping. While the company hit a peak of 50,000 units in March last year, it never reached that milestone again.

According to people familiar with the matter, Ola Electric was paying ₹1,400-1,600 per vehicle for registration—a rate set based on expected sales volume.

As part of a broader cost-cutting drive launched in November 2024, Ola pushed for steep discounts, but the agencies resisted, arguing that lower sales volumes meant higher per-unit costs for them.

By February, talks had turned into an outright standoff.

“One day the company comes and asks for a cost which we did not agree with which resulted in the work being stopped immediately. There was no negotiation involved,” one of the executives said on the condition of anonymity.

Another executive said Ola sought a price cut of nearly 67%, a demand the agencies found untenable.

Unlike traditional automakers that rely on dealerships, Ola Electric operates a direct-to-consumer model through experience centers, making registration agencies critical to its delivery process. With no immediate backup plan, registrations came to a halt.

Amid disagreements over costs, Ola failed to pay Rosmerta dues worth ₹26 crore for three to four months, prompting the agency to file a case in the National Company Law Tribunal (NCLT). The case has since been withdrawn after the dues were cleared.

Ola, for its part, believed it could handle the registration process in-house more efficiently and at a lower cost.

“Ola Electric hired around 200 people to help in its registration process and not rely on the agencies to save costs,” a third executive said.

Read this | Ola Electric may lose subsidy benefit if e-scooter registration delays spill over to FY26

As per a person aware of the development, some people from Rosmerta were also hired to help with the registration process.

Queries sent to Ola Electric remained unanswered. Rosmerta Group did not respond to specific questions about its employees but referred to its statement that all dues had been settled and that it no longer had any relationship with Ola Electric.

In a statement on 12 March, Ola said that it had undertaken a Network Transformation and Opex Reduction Programme.

“This programme has encompassed distribution network transformation projects like shutting all regional warehouses and shipping vehicles, spare parts and accessories from the factory directly to stores, automating registration and other processes,” the statement said.

The company claimed to have saved around ₹90 crore per month due to the execution of this programme.

A senior executive, who is no longer associated with Ola Electric, mentioned that there were instances when the company was not happy with the performance of Rosmerta.

“There were sometimes delays which spoiled the customers experience with the company. When the company thought that the registration process could be done inhouse, the decision was taken to stop working with these agencies,” this person said.

However, another executive close to the matter suggested the decision was primarily driven by Ola’s store network expansion rather than dissatisfaction with Rosmerta. With around 4,000 stores, the company believed registration could be handled at these locations—similar to dealerships—helping cut costs, the person said.

The fallout: Missed deliveries and market jitters

As Ola struggled to transition away from its registration agencies, deliveries slowed.

The waiting period for its electric scooters surged to 20-45 days from the usual 5-7 days before February, store managers at seven Ola Electric outlets across New Delhi, Mumbai, and Bengaluru told Mint.

Under Indian law, vehicles must be registered before delivery, and Ola does not issue temporary registration plates.

In February, the company managed to register only 8,652 vehicles, despite claiming sales of over 25,000 for the month. In March, registrations picked up, reaching 16,412 vehicles so far.

Ola maintains that it will clear the backlog soon.

“The company’s daily registrations have improved significantly, increasing to over 800 per day and crossing the average daily sales for January and February,” it said in a statement 12 March.

Despite the disruption, Ola claimed, in the same filing, that average delivery times have improved—dropping from 12 days to 3-4 days.

Market share and investor concerns

The registration crisis comes at a critical time for Ola Electric.

While Ola has led the market share race in recent years, it was overtaken in December 2024, with Bajaj Auto capturing 25% and TVS Motor Co. Ltd 23.5%, pushing Ola’s share down to 19%. The company reclaimed the top spot in January with 26% market share, but investor skepticism over its execution remains.

Since 19 February, when the company informed the exchanges about the renegotiations, Ola Electric’s stock has fallen over 10%, trading at ₹53.84 per share on the BSE, compared to a 0.08% decline in the BSE Auto Index. The stock had debuted at around ₹76 per share.

Financially, the company is still deep in the red. Ola Electric reported a loss of ₹564 crore in the October-December quarter, widening from ₹376 crore a year earlier. Founder Bhavish Aggarwal has repeatedly emphasized the need to hit 50,000 monthly sales to break even.

“We do feel in the next few quarters, we can get to about 50,000 monthly sales, which takes us to an auto segment Ebitda positive,” he said.

Investors are however questioning the turn of events at Ola Electric which eroded shareholder value.

Also read | Ola Electric service crisis: New team to manage backlog as complaints rise to 80,000 a month

“The events of changing the registration process seem to suggest a lack of planning and reactive management that raise questions among investors. The company could have avoided the dispute with Rosmerta without a full-scale dispute,” said Shriram Subramanian, founder and managing director, InGovern Research Services, a proxy advisory firm.