Ola Electric‘s share price slump further on Monday, going down over 2% to hit an intraday low of ₹88.02. This is the lowest level the scrip has hit since listing at ₹92 apiece.

What Happened: The slump today comes as the EV maker is reportedly under the regulatory scanner of the Automotive Research Association of India (ARAI) due to its recent pricing practices. ARAI has expressed concerns about Ola Electric’s failure to notify the body about a price cut for its S1 X 2 kilowatt-hour model before launching the “BOSS” sale, Business Standard reported.

This lapse could potentially impact the model’s eligibility for a government subsidy under the PM Electric DRIVE Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme.

ARAI, an automotive testing agency under the Ministry of Heavy Industries, grants certification to original equipment manufacturers (OEMs) in line with central motor vehicle rules and certifies OEMs seeking incentives under various central government schemes.

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In its “BOSS” sale, Ola Electric dropped the price of the vehicle from ₹74,999 to ₹49,999. However, the company had reported an ex-factory price of ₹75,001 for this model to ARAI. Based on this price and a battery capacity of 2 kilowatt-hours, the model is certified to receive a subsidy of ₹10,000 per unit.

ARAI has asked Ola Electric to clarify this discrepancy and to present the factual position on this matter promptly, as per the report. If found in violation of these guidelines, the company could face legal action and potentially lose its subsidies.

This is the second action by the nodal ministry for electric vehicles and its testing agency against Ola Electric. Earlier this month, the Ministry of Heavy Industries directed ARAI to investigate consumer complaints related to Ola Electric.

This development comes at a time when Ola Electric is grappling with a series of setbacks. The company has seen a decline in its market share to 28% in September, with sales continuing to dwindle. Additionally, Ola Electric’s share price has been under pressure over the past few weeks, dropping around 20% in the last 30 days due to declining sales and mounting service complaints.

Price Action: Ola Electric’s share price was down 2.05% to trade at ₹88.35 shortly after market open on Monday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.