Ola Electric gets two-year extension on cell-manufacturing PLI milestones

The Ministry of Heavy Industries (MHI), the nodal ministry for India’s automotive sector, has revised the timeline for Ola Electric’s battery-cell manufacturing milestones under the advanced chemistry cell (ACC) production-linked incentive (PLI) scheme. The ministry has given the electric two-wheeler maker a fresh window to meet investment milestones specified under the scheme after it had missed the original deadline.

The revised timeline secures Ola Electric a five-year PLI window through 2031 and could unlock up to Rs 7,240 crore in cumulative incentives, the company said in an exchange filing on Wednesday. The incentives will be disbursed quarterly, beginning next quarter.

The development comes days after Ola Electric’s auditor red-flagged the company’s decision to reverse a Rs 57 crore provision in its Q1 results for liquidated damages related to the missed investment milestone, even though the MHI had not formally approved the company’s request for an extension and waiver as of June-end.


Milestone missed
Ola Cell Technologies, the company’s wholly owned battery-cell subsidiary, had been awarded 20 gigawatt-hours (GWh) of cell manufacturing capacity under the government’s PLI scheme in 2022. Beneficiaries were required to invest Rs 225 crore per GWh within two years. Ola had missed the investment milestone and subsequently sought additional time as well as a waiver of the penalty.

The revised timeline now effectively extends the original schedule by two years, the company said. Ola Electric currently has 2.5 GWh of installed cell-manufacturing capacity, with another 3.5 GWh under installation. The company expects to reach its initial 6 GWh installed-capacity milestone by the end of the current quarter, ahead of the revised December 2026 deadline.

“We hadn't factored any incentives into our business projections after overshooting the original timelines,” Bhavish Aggarwal, Chairman and Managing Director of Ola Electric, said in the statement. “Ola is now well ahead of the government's revised schedule, and enables us to access the full potential of Rs 7240 crore and receive disbursement as soon as next quarter.”

The company is expected to unveil its broader energy product roadmap, including for its battery storage systems Shakti and Mahashakti, and the next phase of its energy platform, at its annual Sankalp event on Saturday.

Ola Electric is building a multi-chemistry cell platform covering NMC (nickel manganese cobalt) and LFP (lithium iron phosphate) chemistries, alongside efforts to increase localization of battery materials and improve manufacturing yields.

Looking beyond mobility
The company’s battery manufacturing push comes as it seeks to expand beyond electric two-wheelers into energy storage and other applications.

In its June quarter results, released last week, the company’s revenue from operations nearly halved to Rs 455 crore from Rs 828 crore a year earlier, as vehicle registrations declined to 43,062 units in the reporting period from 54,676 in the year-ago period, according to Vahan data.

The company managed to narrow its net loss to Rs 336 crore from Rs 428 crore in the corresponding quarter a year earlier.