Electric vehicle manufacturer Ola Electric has filed a substantial claim of approximately Rs 400 crore under the government's Production-Linked Incentive (PLI) scheme for the automobile and auto components sector, according to a report by PTI News.
The claim, based on eligible sales of around Rs 3,000 crore for FY25, translates to an expected incentive rate of 13-14 percent, industry sources told PTI. The incentive is expected to significantly strengthen the company's liquidity position and deliver a positive impact on its financial performance in the coming quarters.
Market Response
Following the announcement, Ola Electric's shares surged over 3 percent on September 15, closing at Rs 60.79 after hitting an intraday high of Rs 61.02. The stock has shown remarkable recovery, gaining approximately 54 percent since hitting its 52-week low of Rs 39.60 in July.
PLI Leadership
Ola was the only two-wheeler Original Equipment Manufacturer (OEM) to receive the PLI incentive last year, marking a significant milestone for both the company and the industry. The company has emerged as the top achiever in PLI-eligible sales in the two-wheeler segment for two consecutive years.
Gen 3 Certification
Ola Electric recently announced that it has received certification of compliance with PLI eligibility assessment requirements for its Gen 3 scooter portfolio, covering all its Gen 3 scooters in the S1 line-up. This certification is set to significantly enhance Ola Electric's profitability from Q2 FY26 onwards, as the Gen 3 portfolio represents the majority of the company's current sales.
Previous PLI Benefits
This isn't Ola's first PLI payout. In March, the company received an incentive of Rs 73.7 crore under the PLI auto scheme, demonstrating its consistent qualification for government incentives.
Financial Impact
The Rs 400 crore incentive is expected to provide crucial financial support to the company, which posted a consolidated net loss of Rs 428 crore for Q1 FY26. However, the company noted that its auto segment cash generation was "nearly neutral" in Q1FY26, with structural improvements in operational expenses and working capital.
Launched in 2021, the PLI scheme for the automobile and auto components sector carries an outlay of about Rs 26,000 crore over five years. The scheme aims to boost domestic manufacturing capabilities and reduce import dependence in the automotive sector.