Ola Electric says scooter discount does not violate PM E Drive scheme

Ola Electric, India's largest electric two-wheeler maker, has taken the stand that it has not slashed the price of its entry-level S1 X 2kWh scooter, as suggested in a notice issued by the Automotive Research Association of India (ARAI). The ARAI had asked Ola for an explanation after the company started offering its S1 X electric scooter for Rs 49,999.

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme offers a buyer-end subsidy of Rs 5,000 per kWh to spur demand for EVs. The S1 X 2kWh, therefore, qualifies for a subsidy of Rs 10,000 per unit.

As part of the application process, the company has to declare various details about the model, including its ex-factory price. Any changes in any of these details have to be intimated to the ARAI. According to the ARAI, the company had submitted a factory-gate price of Rs 75,001 at the time of filing for inclusion in the PM E-DRIVE scheme and has not submitted any further intimation on a price change.

Ola Electric has stated that the current scheme is limited, both in time and inventory, and does not constitute a price cut. Under its "BOSS 72-hour Rush" offer, the model is available for Rs 49,999 for a limited time each day.

In a regulatory filing, Harish Abichandani, chief financial officer at Ola Electric, said: "We have not changed the price of the Ola S1 X 2kWh. We are running a limited-time festive campaign, offering a general discount of Rs 5,000 to all customers and a higher discount of Rs 25,000 to a few customers, but with extremely limited inventories."

Ola executives have also stated in their response that they provided a copy of the invoice, dated October 6, 2024, as proof that customers received a Rs 5,000 discount. The executives claim that they also sent a screenshot of the app confirming that the price of the Ola S1 X 2kWh had not changed.

Experts in the government say that if ARAI finds the response unsatisfactory, Ola Electric could face legal action and lose subsidies for its electric vehicles under the PM E-DRIVE initiative.

"We submitted our response to ARAI and have not received any further communication from them in this regard," the company informed its investors.

Meanwhile, the Central Consumer Protection Authority recently issued a notice to Ola Electric following over 10,000 complaints about its poor after-sales service in the past year. The company has also come under the lens of the Ministry of Heavy Industries for the same issue.