‘Material Weakness’ Detected: Ola Electric Auditor Questions Subsidiary’s Internal Controls

As per the news report, Ola Electric has come under scrutiny after its auditor flagged a material weakness in inventory control at its main operational unit. This disclosure comes amid rising regulatory pressure, falling investor confidence, and discrepancies in reported scooter sales and registrations.

Material Weakness in Ola Electric's Inventory Verification

Ola Electric Technologies, the primary revenue-generating subsidiary of Ola Electric Mobility, lacked proper internal controls for verifying raw materials and finished goods across its retail outlets and state-level hubs. According to the statutory auditor BSR & Co. LLP, this weakness could result in material misstatements in inventory, cost of materials consumed, and changes in work-in-progress and stock-in-trade balances.

Despite this concern, the auditor stated that overall internal financial controls were adequate in all other material respects and were operationally effective as of March 31, 2025.

Investor Confidence Declines as Key Stakeholders Exit

Several major investors have trimmed or exited their stakes in Ola Electric. Hyundai Motor has completely divested its holding, while Kia has significantly reduced its investment. Japanese investor SoftBank has sold 2.15% of its stake through open market deals between July 15 and September 2, reducing its total holding to 15.68%.

Despite the sell-off, SoftBank remains the second-largest shareholder with 691.6 million shares, behind founder Bhavish Aggarwal.

Read More: EV Two-Wheeler Sales August 2025: TVS Leads, Ola Electric Overtakes Bajaj, Ather!

Regulatory Heat Intensifies Over Sales and Complaints

Transport departments across multiple states have conducted raids, sealed showrooms, and issued show-cause notices in response to consumer complaints. Meanwhile, the Ministry of Heavy Industries has instructed the Automotive Research Association of India (ARAI) to probe discrepancies between Ola’s reported sales and actual vehicle registrations.

In February 2025, Ola claimed 25,000 scooter sales. However, data from the Vahan portal showed only 8,600 units registered. Ola later clarified these were bookings, not completed deliveries, stating revenue is booked only after delivery and registration.

Ola Electric Share Price Performance

On September 8, 2025, Ola Electric share price opened at ₹60.40 on NSE, above the previous close of ₹59.92. During the day, it surged to ₹61.70 and dipped to ₹60.35. The stock is trading at ₹61.30 as of 9:17 AM. The stock registered a significant gain of 2.30%.

Over the past week, it has declined by 1.07%, over the past month, it has moved up by 52.75%, and over the past 3 months, it has moved up by 24.42%.

Conclusion

Ola Electric’s internal control lapse, paired with growing regulatory scrutiny and major investor exits, raises significant concerns about governance and transparency. As the EV sector expands, consistent internal practices and clear communication with stakeholders will be critical for Ola Electric’s long-term positioning.

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