Ola Electric: Driving Forward with PLI Certification and Expansion Plans
- Ola Electric secures certification for its second product under the PLI scheme for the automotive industry, obtaining the Domestic Value Addition (DVA) certification for the S1 Pro (Gen-2) electric scooter.
- This achievement marks Ola Electric as the first two-wheeler EV maker to qualify under the Ministry of Heavy Industries’ scheme, following the earlier certification of their S1 Air scooter.
- The certification process, initiated in October, concluded on February 9, 2024, enabling both S1 Pro and S1 Air scooters to become eligible for government subsidies for five years.
- Ola Electric stands to benefit from incentives ranging between 13 percent and 18 percent of the determined sales value (DSV) of the products, as part of the PLI scheme, over the next five financial years.
- The company’s expansion plans include raising funds through a fresh issue of shares and an offer-for-sale (OFS) of shares, with allocations for capital expenditure, debt repayment, and further development of EV manufacturing facilities.
Ola Electric, the electric vehicle (EV) manufacturer, has recently achieved certification for its second product under the Production-Linked Incentive (PLI) scheme for the automobile and auto component industry. Sources familiar with the matter, speaking to Moneycontrol on condition of anonymity, disclosed that the 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 development signifies a significant milestone for Ola Electric, as it marks the second electric scooter from their lineup to gain approval under this scheme. Earlier in January, the company received the DVA certificate for its S1 Air scooter, thereby becoming the inaugural two-wheeler EV maker to qualify under the Ministry of Heavy Industries’ scheme.
The application for PLI certification for the S1 Pro was lodged in the latter part of October at ICAT, Manesar. The certification was officially conferred on February 9, 2024, allowing both Ola S1 Pro and Ola S1 Air to qualify for subsidies under the government’s Auto PLI scheme for a period of five years from the date of certification. Despite attempts to seek clarification, responses to inquiries directed to spokespeople at the Ministry of Heavy Industries and Ola Electric remained pending at the time of publication.
Under the PLI scheme, Ola Electric stands to benefit from incentives for up to five consecutive financial years, starting from 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. Of this amount, 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 in the EV industry. The company has constructed a gigafactory in Krishnagiri, Tamil Nadu, and plans 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, representing an impressive 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.