Ola Electric came under the spotlight this week after its auditor BSR & Co. LLP flagged inconsistencies in the company’s inventory and customer dues data for financial year 2025. On Tuesday, the company responded strongly, saying the matter was a one-time issue that happened during a restructuring of its sales and service network in the fourth quarter of FY25.
The situation has triggered debate about corporate governance, the company’s financial health, and how Ola Electric plans to build trust with investors and regulators.
What the Auditor Found
The auditor carried out its routine checks of Ola Electric’s books and compared them with the company’s quarterly filings to banks. During this process, it found 19 cases where the scooter count at Ola’s stores and the amount of money owed by customers did not match the company’s filings with lenders.
For example, in one quarter Ola Electric’s books showed inventory worth about ₹367 crore. But in its filing with Bank of Baroda, the number stood at ₹341 crore. That meant a gap of ₹26 crore. In another case, Ola reported customer dues of ₹1,187 crore in its own records, while it told the bank that dues stood at ₹1,221 crore. This showed a mismatch of ₹34 crore.
In some filings, the numbers even changed from one bank to another. Ola reported ₹320 crore in inventory to one bank and ₹361 crore to another bank for the same quarter. Such differences raised eyebrows.
The auditor also pointed to weaknesses in Ola Electric’s internal controls. It said the company did not properly verify inventory at its stores and warehouses. This gap could lead to wrong reporting of stock, raw materials, or finished scooters.
How Ola Electric Responded
Ola Electric explained that the issue happened because of a temporary change in how the company handled inventory data during its Q4 FY25 restructuring. The company reorganized its retail network and shifted some operational systems. During this change, some mismatches occurred in the way numbers got reported to banks.
Ola Electric stressed that the mismatches did not reflect fraud or systemic failure. The company said it double-checked inventory using its ERP system, which tracks every scooter by its unique Vehicle Identification Number (VIN). According to Ola, this check showed no gaps between actual stock and the company’s records.
The management assured investors that physical verification of inventory happened during the annual audit and that the numbers matched with what the company reported. The auditor still gave an unqualified opinion, which means it did not find any material misstatement in the overall financial results as of March 31, 2025.
The company also said it would take extra steps to tighten controls, add new technology tools, and prevent such incidents in the future.
Wider Issues Facing Ola Electric
The auditor’s remarks come at a difficult time for Ola Electric. The company already faces questions from regulators, investors, and customers.
Regulatory Scrutiny
Authorities have investigated Ola Electric after consumer complaints and data mismatches. The Ministry of Heavy Industries asked the Automotive Research Association of India to check differences between Ola’s claimed sales and actual scooter registrations on the Vahan portal.
For example, in February 2025 Ola said it sold 25,000 scooters. But the Vahan data showed only about 8,600 registered units. Ola explained that many of those sales were still at the booking stage and not yet delivered. Still, the gap created doubts about reporting accuracy.
Investor Concerns
Investors have started to reduce their exposure. Hyundai Motor exited completely. Kia Motors cut its stake. SoftBank sold part of its holding, bringing it down to around 15.7 percent. These moves show that large backers want to limit their risks until the company stabilizes.
Business Performance
The company’s financial results also show pressure. In the first quarter of FY26, Ola Electric reported a net loss of ₹428 crore, higher than the loss of ₹347 crore in the same quarter last year. Revenue dropped sharply to ₹828 crore compared with ₹1,644 crore a year ago.
Deliveries fell as well. The company sold about 68,000 scooters in Q1 FY26, down from more than 125,000 in Q1 FY25. This drop pushed Ola’s market share in the electric scooter space from nearly 49 percent to under 20 percent.
Market Reaction
Investors reacted quickly to the news about the auditor’s remarks. On September 8, Ola Electric’s shares opened at ₹60.40 on the National Stock Exchange. The stock briefly went up to ₹61.70 but later settled lower. On the Bombay Stock Exchange, the stock fell more than 7 percent on the same day.
By September 10, the share price hovered around ₹58.50, down another 2 percent for the day. Year to date, the stock has lost nearly 30 percent of its value.
The market reaction shows that investors remain worried about the company’s financial reporting, growth prospects, and ability to compete in a crowded EV market.
Silver Lining: PLI Incentive Approval
Amid the turbulence, Ola Electric received some good news. The company secured approval under the government’s Production Linked Incentive (PLI) scheme for its new Gen 3 scooter models. This approval allows Ola to claim incentives of up to 18 percent of sales value, which could improve margins and support future growth.
The PLI scheme aims to promote local manufacturing and reduce import dependence. For Ola Electric, this incentive could provide breathing space while it works to fix governance issues and win back investor trust.
Why This Matters
Ola Electric plays a big role in India’s electric vehicle revolution. It has positioned itself as a leader in the scooter segment and has ambitions to expand into electric motorcycles, cars, and even battery manufacturing.
But the company now faces the classic test of scale versus governance. Growth brought it into the public eye, but mistakes in reporting and weak controls threaten its reputation. For a listed company, trust with investors and regulators is as important as technology and design.
The Road Ahead
Ola Electric must do three things to move forward:
- Fix Internal Controls: The company needs stronger systems to ensure inventory, customer dues, and sales numbers match across its books, banks, and government filings. Technology such as VIN tracking and ERP systems can help, but management must enforce discipline.
- Win Back Investors: Ola has to improve transparency and deliver on promises. Investors want consistent results and fewer surprises. The company also needs to stop large backers from exiting further.
- Deliver Better Results: The company must reduce losses, grow deliveries, and regain market share. The PLI scheme gives a cushion, but sustainable growth requires strong demand, efficient operations, and customer trust.
Conclusion
The inventory mismatch flagged by Ola Electric’s auditor shows how even one-time issues can shake confidence in a fast-growing company. Ola insists that the problem came from a temporary restructuring and that systems remain sound. Yet regulators, investors, and the market continue to watch closely.
The company now faces the challenge of proving that it can grow responsibly, maintain transparent reporting, and rebuild credibility. How Ola Electric handles these issues in the next few quarters may decide whether it remains a leader in India’s EV race or struggles to keep pace with its rivals.
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