With second PLI certification, IPO-bound Ola Electric eyes 13% subsidy

Ola Electric is the only two-wheeler electric company to receive a nod as incumbents struggle with localization standards

IPO-bound Ola Electric’s flagship S1 Pro e-scooter has received Domestic Value Addition (DVA) certification under the government's production-linked incentive (PLI) scheme for the automobile and auto component industry to book a 13 per cent subsidy on the sales value. It is the second product from India’s largest electric two-wheeler manufacturer to receive the PLI mandate, even as the traditional incumbents struggle with localisation required to win the state subsidies, sources said.

Ola S1 Pro has successfully met the minimum localisation criteria of 50 per cent as mandated by the Ministry of Heavy Industries to benefit from the PLI scheme. A formal announcement is expected later this week. TVS, Bajaj and Hero MotoCorp are among the incumbents in the fray for PLI schemes currently, according to people familiar with the matter.

The Bhavish Aggarwal-led company declined to comment on the development.

Earlier, Ola S1 Air had also received the certification as the three-year-old company builds an electric value chain shaping up the nascent domestic market.

The Automotive Research Association of India (ARAI) is the nodal testing agency to grant the certification after thorough checks on the localisation standards of the components. Under the scheme, Ola Electric is eligible for incentives for up to five consecutive financial years from FY24. 

Ola S1 Pro and S1 Air have bagged a 13 per cent subsidy, which can go up to 18 per cent depending on the progress in localisation and determined sales value (DSV).

The PLI scheme for the automobile and auto component industry, with an outlay of Rs 25,938 crore for five years, provides financial incentives to boost domestic manufacturing of advanced automotive technology products. This includes electric vehicles and their components.

In a major move to deepen the 2-wheeler electric vehicle (EV) penetration, Ola Electric recently unveiled S1X 4kWh scooter with a powerful 6kW motor and a long range of 190 km. The all-new S1X 4kWh is priced at Rs 1,09,999 with deliveries starting April 2024 onwards. The company has also announced an industry-first extended battery warranty of 8 years or up to 80,000 km across all its products, addressing customer concerns about battery health. The aim is to also eliminate biggest barrier in the EV adoption.

Ola Electric has also unveiled plans to expand its service network by 50 per cent from the current 414 service centers to about 600 centers across the country by April 2024. Additionally, the company has announced plans to ramp up its fast-charging network rapidly to 10,000 points by the next quarter.

Ola Electric recently said it recorded over 31,000 registrations (as per VAHAN portal) in January and maintains a market share of about 40 per cent. The company clocked its highest-ever monthly registrations during the month and posted year on year (Y-o-Y) growth of over 70 per cent compared to the same month last year.