Ola Breaks Ground: Four EV Scooters Secure PLI
Ola Electric has clinched another victory in the electric vehicle arena. The company’s S1 X 3 kWh and S1 X 4 kWh scooters have successfully secured Production Linked Incentive (PLI) certification from the Automobile Research Association of India (ARAI). Moreover, this achievement underscores Ola Electric’s dedication to local manufacturing and development. Meeting the 50% minimum localization requirement set by the Ministry of Heavy Industries. Ola Electric has solidified its position as a key player in India’s electric scooter market.
Ola: Incentives and Stock Surge
The company has emerged as a major beneficiary of the Production Linked Incentive (PLI) scheme for the automobile. However, the company is set to receive substantial incentives ranging from 13% to 18% of the sales value. For its compliant products for the next five financial years, starting from Fiscal 2024.
This PLI boost solidifies Ola Electric’s position as a leader in the electric vehicle (EV) market. With the certification of its S1 X scooters, Ola Electric becomes the only EV manufacturer to have four products – the S1 Air, S1 Pro, and S1 X models in both 3 kWh and 4 kWh versions – compliant with the PLI scheme. Moreover, the S1 Air had previously secured PLI certification at the Auto PLI Conclave in January 2024.
The PLI incentives are expected to significantly boost Ola Electric’s profitability and fuel its growth plans. The shares of Ola Electric surged by 4.4% on Wednesday, closing at INR 143.8 on the BSE. However, this surge reflects the market’s confidence in Ola Electric’s future prospects and its ability to capitalize on the growing demand for electric vehicles in India.
Boosting Revenues and EV Leadership
Ola Electric Mobility said in a statement, “S1 X 3 kWh and S1 X 4 kWh together contribute to almost half of our revenues, and with the PLI now in place, we will be able to further improve our bottom line. Receiving the PLI certification for the premium and mass-market products affirms our vertically integrated manufacturing strength marking a significant achievement in advancing India’s EV vision. The government’s ambitious Auto PLI Scheme is poised to enhance local supply chains, foster domestic manufacturing, and assist companies in achieving economies of scale.”
Ola Electric was one of the biggest beneficiaries of the Center’s Production Linked Incentive scheme for the automobile. The PLI scheme was launched in 2021, which had a budget of INR 25,938 crore. Moreover, it aims to incentivize domestic manufacturing of AAT products to encourage investments in the automotive value chain within India. It focuses on Zero Emission Vehicles—electric vehicles and hydrogen fuel cell vehicles—with incentives for car manufacturers and component producers.
Apart from the PLI on AAT products, Ola Electric has also won a 20GWh capacity allocation under the PLI scheme for Advanced Chemistry Cell Battery Storage. The company was granted the capacity in March 2022, with associated incentives to be given for a period of five years beginning from the commercial production date at Ola Gigafactory, Krishnagiri, Tamil Nadu.
A Boost for India’s EV Industry from Ola
The recent PLI certification of Ola Electric for its S1 X scooters is one such major feat for the industry of electric vehicles in India. Successful completion of rigorous component localization testing and verification demonstrates its commitment to fostering domestic manufacturing. Under this PLI scheme, this support can prove to be important in making supply chains local and bringing about economies of scale to provide huge impetus to the country’s EV sector.
PLI approval for Ola scooters comes just after the flagship FAME II subsidy offered by the government to the EV industry expired in March. However, though the FAME II subsidy has been replaced by the EMPS, the new FAME 3 subsidy is being worked upon by the government, announced Union Heavy Industries Minister HD Kumaraswamy.
Coupled with the PLI scheme and supported by the upcoming FAME 3 subsidy, India’s EV industry stands on fertile ground for continuous growth and for further innovation to be sustained.