Notice to Ola Electric For Not Fulfilling PLI Commitments

To make matters worse, Ola Electric Mobility has apparently received a notice from the Ministry of Heavy Industries (MHI) for not fulfilling its obligations under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage PLI program. In addition to Ola, the notifications were also sent to Reliance and Rajesh Exports, two other businesses that benefitted from the battery PLI scheme. Ola Electric would be penalised INR 12.5 lakh per day beginning January 1, 2025, until it fulfils its obligations under the PLI scheme, according to a media report. ACC Energy Storage, which bid as Rajesh Exports, and Reliance New Energy Limited (RNEL), owned by Mukesh Ambani, will pay INR 5 lakh every day.

Response from Ola Electric

A representative for Ola Electric responded to the notice by saying that its purpose is to encourage businesses to meet the PLI program's battery manufacturing goals as soon as possible. According to a senior official quoted in a media report, "The scheme's goal is not to collect penalties." The official did add, though, that the businesses are free to argue their case and request a waiver of this rule. Ola Electric has previously declared that it will start producing its cells commercially in Q1 of FY26, and the company is on track to satisfy the deadlines. Under the government's ACC PLI program, Ola Electric will be the first company in India to produce lithium-ion cells on a commercial basis.

What is PLI Scheme?

With an INR 18,100 Cr budgeted investment, the PLI Scheme seeks to increase indigenous battery manufacturing capacity and lessen dependency on imports. In addition to the incentives, the MHI offered the companies capacities through the PLI Program. Ola Electric agreed to produce advanced chemistry cells for EVs under the ACC PLI project in 2022. The plan prioritises indigenous value addition and global competitiveness in battery manufacture, with a goal manufacturing capacity of 50 GWh. It is important to remember that Ola Electric has benefitted from other government programs like PM E-Drive and FAME-II, which mandate that businesses maintain service centres and offer warranties.

Trouble Continues for Ola Electric

In addition to the aforementioned incident, a media outlet also reported that Ola Electric's Roadster X is still delaying delivery due to unresolved technical concerns and the ongoing homologation process. Bhavish Aggarwal stated at the bike introduction that the initial plan was for the bike series to start by mid-March 2025. This comes shortly after MHI began to investigate the business for service-related problems, including multiple customer complaints about delayed deliveries, faulty cars, and subpar customer support.