Shares of Ola Electric Mobility Ltd are in focus on Wednesday morning after the Bhavish Aggarwal-led company said its material subsidiary Ola Electric Technologies received certification for compliance with the eligibility assessment requirements, as per the Production Linked Incentive (PLI) scheme, for the automobile and auto components.
In a filing to stock exchanges, Ola Electric said two of its scooters -- S1 X 3 kWh and S1 X 4 kWh -- successfully met the stringent minimum localisation criteria of 50 per cent, as mandated by the Ministry of Heavy Industries.
"With this, Ola Electric Technologies has become the only 2W and pure-play EV manufacturer to receive the certification for compliance with the eligibility assessment requirements (PLI certificate) for four products - S1 Air, S1 Pro, S1 X (3 kWh, and 4 kWh)," it said.
To recall, Ola Electric Technologies had earlier received the certificate for S1 Air at the Auto PLI Conclave organised in January 2024.
Ola Electric said S1 X 3 kWh and S1 X 4 kWh models together contribute to almost half of the revenues and, with the PLI now in place, Ola Electric Technologies will be able to further improve its 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 said.
Ola Electric shares plunged 6.15 per cent to Rs 137.38 on Tuesday, despite hitting a fresh high of Rs 157.53 earlier in the day. The stock is still up 82 per cent over its IPO issue price of Rs 76 apiece.
The certification has been granted by The Automotive Research Association of India (ARAI) after testing of the product and checks on the localisation of the components. Under the scheme, OET is eligible for incentives for up to five consecutive financial years, commencing from Fiscal 2024.
"The incentive would range between 13 per cent and 18 pr cent of the “determined sales value” (DSV) of the products," Ola Electric said.
Ola Electric has also been awarded 20GWh capacity by the government under its PLI scheme for Advanced Chemistry Cell (ACC) Battery storage in March 2022. The company is eligible to receive incentives under the Cell PLI scheme over a five-year period from the date of commissioning of the Ola Gigafactory in Krishnagiri, Tamil Nadu.