The 13-18% incentive on determined sales value represents substantial financial support that could help Ola maintain competitive pricing while improving unit economics.
26 Aug 2025 | 7561 Views | By Anurag Chaturvedi
Ola Electric Mobility today announced that it has secured Production Linked Incentive (PLI) certification for its entire Gen 3 scooter portfolio, completing the company's journey towards full PLI compliance across its current product lineup. The certification, granted by the Automotive Research Association of India (ARAI), positions Ola Electric to receive ...
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Ola Electric Mobility today announced that it has secured Production Linked Incentive (PLI) certification for its entire Gen 3 scooter portfolio, completing the company's journey towards full PLI compliance across its current product lineup. The certification, granted by the Automotive Research Association of India (ARAI), positions Ola Electric to receive substantial government incentives that could boost profitability from Q2 FY26 (July-September 2025) onwards.
The certification covers all seven models in Ola's Gen 3 portfolio – S1 Pro 3 kWh, S1 Pro 4 kWh, S1 Pro+ 4 kWh, S1 X 2 kWh, S1 X 3 kWh, S1 X 4 kWh, and S1 X+ 4 kWh – which represent the majority of the company's current sales volume. With this achievement, Ola Electric's entire Gen 2 and Gen 3 scooter portfolio has become eligible for incentives ranging from 13% to 18% of determined sales value (DSV) until 2028.
"Securing PLI certification for our Gen 3 scooters, which form the bulk of our sales, is a critical step towards profitability," said an Ola Electric spokesperson. "This will directly strengthen our cost structure and margins, enabling us to deliver sustainable growth. With our auto business targeted to turn EBITDA positive, the certification acts as a strong catalyst to achieve that goal while ensuring our customers continue to get the best-in-class EVs at highly competitive prices."
The Production Linked Incentive scheme for the automobile and auto components sector represents one of India's most ambitious industrial policy initiatives. Approved by the Union Cabinet on September 15, 2021, with a massive budgetary outlay of ₹25,938 crore, the scheme aims to transform India into a global manufacturing hub for Advanced Automotive Technology (AAT) products over a five-year period.
The scheme operates on two primary tracks. The first is the champion OEM incentive scheme, which is focused on manufacturers of battery electric vehicles and hydrogen fuel cell vehicles across all segments – from two-wheelers to commercial vehicles. Companies approved under this category include industry giants like Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hyundai Motor India, Hero MotoCorp, Bajaj Auto, and Ola Electric among 18 total beneficiaries.
The second is the Component Champion Incentive Scheme, targeting manufacturers of advanced automotive components, with 67 companies approved including Bosch, Maruti Suzuki, Hero MotoCorp, Motherson Sumi, and Sona BLW Precision.
To qualify for the incentives, manufacturers must achieve at least 50% Domestic Value Addition (DVA) in their products, a stringent requirement that ensures deep localization and reduces import dependency. The certification process involves comprehensive evaluation by government-affiliated testing agencies like ARAI and the International Centre for Automotive Technology (ICAT), including product testing and verification of localized components.
Ola Electric's PLI certification journey began in early 2024 when it became the first Indian electric two-wheeler company to secure PLI certification for its S1 Air scooter. This was quickly followed by certification for the S1 Pro Gen 2 in February 2024, and subsequently for individual Gen 3 models including the S1 X variants throughout 2024.
The company has been an advocate of local manufacturing and has pursued a vertical integration strategy, with operations spanning from cell manufacturing at its upcoming Gigafactory to complete vehicle assembly at its Futurefactory in Tamil Nadu. This approach has enabled Ola to meet and exceed the stringent 50% DVA requirement across its product range.
While the PLI scheme has attracted significant interest with total proposed investments exceeding well over Rs 1 lakh crore from approved applicants, actual disbursements from the government have been relatively modest. As of February 2025, only ₹246.21 crore has been disbursed to two applicants – Tata Motors and Mahindra & Mahindra – who submitted claims of ₹142.13 crore and ₹104.08 crore respectively for FY2024.
The slow uptake has been attributed to several factors, including complex documentation requirements that need statutory auditor endorsement, challenges in achieving the mandated 50% localization threshold, the time required to ramp up production of AAT products, and initial confusion around compliance standards between PLI and other schemes like FAME-II.
Despite these challenges, the cumulative determined sales of electric vehicles under the scheme reached ₹14,657 crore by December 2024, indicating growing momentum in the sector.
For Ola Electric, the PLI certification timing is particularly significant as the company prepares for sustained profitability. The 13-18% incentive on determined sales value represents substantial financial support that could help Ola maintain competitive pricing while improving unit economics. This is especially important as the company faces increasing competition from both established players and new entrants in the electric two-wheeler segment.
The certification announcement coincides with Ola's aggressive product expansion plans. During its recent 'Sankalp' event, the company unveiled new models including the S1 Pro Sport with 5.2 kWh and 4 kWh battery options, the S1 Pro+ 5.2 kWh, and the Roadster X+ 9.1 kWh powered by the indigenously developed 4680 Bharat Cell.
These new products, priced between ₹1,49,999 and ₹1,89,999, demonstrate Ola's confidence in leveraging PLI benefits to offer competitively priced products with advanced features. Deliveries for the S1 Pro Sport are scheduled to commence in January 2026, while the S1 Pro+ 5.2 kWh and Roadster X+ 9.1 kWh will be available during the upcoming Navratri festival.
Ola Electric's success in securing comprehensive PLI certification sends important signals to the industry. First, it validates that deep localization is achievable even in the relatively nascent EV industry. Second, the incentives provide a clear pathway for EV manufacturers to achieve sustainable profitability. Third, early movers in securing PLI certification gain significant cost advantages over competitors. Finally, success stories like Ola's encourage development of local component suppliers and ecosystem partners.
The PLI certification milestone comes at a time when the government has allocated ₹2,819 crore for the PLI auto scheme in FY2026, signaling continued commitment to the initiative despite initial slow disbursements. The recent extension of the scheme tenure by one year to March 31, 2028, provides additional runway for manufacturers to meet eligibility criteria and benefit from incentives.
With the scheme's focus on Zero Emission Vehicles (ZEVs) including battery electric and hydrogen fuel cell vehicles, the government aims to position India as a global hub for clean mobility solutions. The emphasis on domestic value addition ensures that the benefits of this transition accrue to the Indian economy through job creation, technology development, and reduced import dependency.
Ola Electric's achievement in securing PLI certification for its entire Gen 3 portfolio marks a watershed moment not just for the company but for India's electric vehicle industry.