Ola Electric Secures 2-Year PLI Extension for Battery Cells, INR 7,240 Crore Incentive Opportunity
Ola Electric has bagged a two-year extension under the government’s Advanced Chemistry Cell (ACC) PLI scheme, unlocking up to ₹7,240 crore incentives thru 2031 for its 20 GWh battery cell allocation. The new timeframe provides for quarterly incentive payments as Ola scales up manufacturing capacity.
The Ministry of Heavy Industries (MHI) has provided Ola Electric, an electric vehicle manufacturer, with updated schedules for its advanced chemistry cell (ACC) production-linked incentive (PLI) programme. The original timescales have now been effectively extended by two years by MHI.
The updated schedule allows Ola Electric to access a maximum of INR 7,240 crore in cumulative PLI incentives and provides a five-year PLI window till CY2031 for its 20 GWh allocation. In order to incentivise consistent growth as the company expands its cell-manufacturing operations, payments will be made quarterly starting from the next quarter.
How MHI Extension will Help Ola Electric?
With an additional 3.5 GWh in the works, Ola Electric's cell-manufacturing capacity is already 2.5 GWh. By the conclusion of the current quarter, the company plans to have reached 6 GWh. The first installed-capacity milestone will thus be achieved much before the government's new December 2026 deadline. This comes after Ola Electric, anticipating a possible penalty under the government's battery-cell PLI plan, in the June quarter reverted an INR 57-crore provision. The turnaround contributed to a reduction in the company's first-quarter FY27 losses.
The new schedule is more than just an extension, according to Ola Electric Chairman and Managing Director Bhavish Aggarwal. By turning a previous milestone overhang into a five-year, quarterly PLI potential of up to INR 7,240 crore, it changes the economics of Ola's cell sector. After exceeding the initial deadlines, Aggarwal elaborated that the company had neglected to include incentives in its business estimates. With the government's amended timeline in hand, Ola can tap into the full potential of INR 7,240 crore and start receiving disbursements as early as next quarter. The company is now running ahead of schedule.
Concerns Raised by Ola’s Auditor
Although Ola Electric was waiting for approval to request further time to complete milestones and a remission of penalties, its auditor highlighted concerns about the firm reversing a provision for penalties under the government's battery cell PLI plan, which was for INR 57 crore. Prior to a formal waiver, the auditor detected the reversal. The same portion also notes that four years ago, Ola Electric was chosen for the PLI plan and had to invest INR 225 crore for every GWh of capacity that was allocated within two years, which it failed to do. The timeframe for incentives moving forward is addressed in the updated timeline approval under ACC PLI, which was previously detailed.
Nevertheless, when it comes to accounting for penalty waivers, the auditor note stresses the significance of official regulatory authorisation. Ola Electric also revealed that the PLI programme for the automotive and auto parts industry has certified its Gen 3 scooter range for conformity. In accordance with MHI, the Automotive Research Association of India (ARAI) issued the certification. All seven of the Gen 3 variations mentioned in the document are covered by the certification. According to the document, Ola might receive incentives between 13% and 18% of the scooters' DSV until the year 2028 thanks to the certification. An additional point is that it boasts PLI certification for its Gen 2 scooters.
