Ola Electric receives second product certification under PLI scheme: Report

Ola Electric, the electric vehicle (EV) manufacturer, has attained certification for its second product under the Production-Linked Incentive (PLI) scheme for the automobile and auto component industry, according to sources familiar with the matter who spoke to Moneycontrol on condition of anonymity.

The latest certification has been granted to Ola Electric's S1 Pro (Gen-2), which has received the Domestic Value Addition (DVA) certification under the Auto PLI Scheme. This achievement marks the second electric scooter from Ola’s lineup to gain approval under this scheme. In January, the company received the DVA certificate for its S1 Air scooter, making it the inaugural two-wheeler EV maker to qualify under the Ministry of Heavy Industries' scheme.

Sources close to the development revealed Moneycontrol, "The company applied for PLI certification for S1 Pro in the second half of October at ICAT, Manesar, and received the certification on February 9, 2024. Ola S1 Pro and Ola S1 Air are now eligible for subsidies under the government’s Auto PLI scheme for five years from the date of certification."

Despite attempts to seek clarification, responses to emailed queries directed to spokespeople at the Ministry of Heavy Industries and Ola Electric remained pending at the time of publishing.

Under the PLI scheme, Ola Electric stands to benefit from incentives for up to five consecutive financial years, beginning in fiscal 2023-24. The incentives are expected to range between 13 percent and 18 percent of the determined sales value (DSV) of the products.

In December, Ola Electric submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI), outlining plans to raise Rs 7,250 crore through a fresh issue of shares and an offer-for-sale (OFS) of shares. A portion of the funds raised, specifically Rs 1,226 crore, is earmarked for capital expenditure, with an additional Rs 800 crore allocated for debt repayment.

Established in 2015 by Bhavish Aggarwal, Ola Electric has made significant strides, including the construction of a gigafactory in Krishnagiri, Tamil Nadu. The company also intends to further expand its EV business by establishing India's inaugural lithium-ion cell manufacturing facility in Tamil Nadu.

Despite the challenges posed by the market, Ola Electric has demonstrated robust financial performance, with consolidated revenue reaching Rs 2,782 crore in FY23, marking a remarkable increase of nearly 510 percent compared to the previous year. However, the company also reported a widened net loss of Rs 1,472 crore, doubling from the Rs 784 crore loss recorded in FY22.