Ola Electric Technologies Faces Insolvency Threats Amid Vendor Payment Disputes and Growing Operational Challenges

Ola Electric Mobility’s subsidiary is currently facing insolvency filings from two major vehicle registration service providers in India due to unpaid debts, exacerbating the ongoing difficulties for the electric vehicle manufacturer.

Rosmerta Digital Services and Rosmerta Safety Systems — providers of vehicle registration assistance and high-security registration plates respectively — have independently submitted insolvency applications against Ola Electric Technologies, as stated by sources familiar with the situation.

Ola Electric Technologies, which is wholly owned by Ola Electric Mobility, generates a significant portion of its parent company’s revenue.

Rosmerta Digital Services is asserting that Ola Electric owes them just over 220 million rupees ($2.5 million), while Rosmerta Safety Systems has claimed nearly 25 million rupees as outstanding payments, according to the sources.

The electric scooter manufacturer — which receives backing from SoftBank Group Corp. — informed the stock exchanges late Saturday that Rosmerta Digital Services had initiated insolvency proceedings against its subsidiary in the National Company Law Tribunal in Bengaluru, Ola Electric’s headquarters. The company contends that it vigorously contests these claims and is currently seeking legal guidance.

Both Rosmerta Digital Services and Rosmerta Safety Systems opted not to comment. In response to inquiries about the insolvency petitions against its subsidiary, Ola Electric directed Bloomberg to its stock exchange statement.

These filings come as Ola Electric is changing its approach to vehicle registrations. Last month, the firm indicated in a filing that it was “renegotiating” terms with its service providers, which include Rosmerta Digital and Shimnit India Pvt. Founder and CEO Bhavish Aggarwal mentioned on X last week that the company was transitioning its registration process “in house.”

The insolvency petitions represent yet another hurdle for the company, which is also grappling with regulatory scrutiny, customer dissatisfaction, and financial difficulties.

A Bloomberg News report indicated that more than 95 percent of Ola’s 4,000 retail locations lacked the appropriate approvals to showcase or sell unregistered vehicles. Consequently, transport authorities in several states have conducted raids, shut down outlets, confiscated vehicles, and issued notices to the company.

Additionally, Ola Electric is currently undergoing an extensive workforce reduction, as reported earlier this month by Bloomberg. Its stock has plummeted over 65% from its peak since the company’s IPO launch in August, reflecting growing investor worries regarding its operational and regulatory challenges.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)