More than half of the EV scooters sold by Ola Electric will now be eligible for PLI Auto Benefits.
21 Aug 2024 | 5024 Views | By Amit Vijay M
Ola Electric's top two brands, Ola S1 3kw and S1X 4kw, which account for nearly half of its sales, have become eligible for the 13–18% subsidy under the Rs 25,938 crore Production Linked Incentive (PLI) auto scheme for fiscal FY 25.
The firm said in its disclosure to the ...
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Ola Electric's top two brands, Ola S1 3kw and S1X 4kw, which account for nearly half of its sales, have become eligible for the 13–18% subsidy under the Rs 25,938 crore Production Linked Incentive (PLI) auto scheme for fiscal FY 25.
The firm said in its disclosure to the exchanges that it has delivered over 1.2 lakh scooters for first quarter of FY 25. Ola Electric CEO Bhavish Aggarwal took to microblogging site X, formerly known as Twitter, to say that the S1X 3 and 4 kWh scooters have received the Domestic Value Addition (DVA) certification under the Production Linked Incentive (PLI) Scheme. These two products account for nearly 50% of Ola’s orders. "More wind in our sails as we build India's EV future," Bhavish added. The government's PLI auto scheme, which allows the qualifying OEM to claim incentives for five years, begins in fiscal 2024.
As Ola Electric has received DVA certification in FY 25 for its top-selling two scooters, it will be able to claim the benefits for the full FY25 for these two models on the total units sold by the company in the current year, analysts indicated.
The government's PLI in incentive is a sales-based scheme, which means only after production is done and sales are made, can the OEM claim for the incentives.
Market experts add that “Ola Electric stands to gain close to Rs 15,000 to 18,000 per unit, which would come in handy and provide the firm with a financial boost to drive increased penetration of EVs across the country while paring down its net loss of Rs 347 crore for the April-July quarter of the current fiscal year (Q1FY25), compared to Rs 267 crore net loss reported in Q1FY24”.
In a statement to the exchanges, an Ola Electric spokesperson stated that the company has become the only pure-play electric two-wheeler maker to receive certification for compliance with the eligibility assessment requirements (PLI certificate) for four products - S1 Air, S1 Pro, and S1 X. The company had previously received the S1 Air certificate from the Auto PLI in January 2024.
"S1 X 3 kWh and S1 X 4 kWh together account for nearly half of our revenues, and with the PLI in place, we will be able to further improve our bottom line. Receiving PLI certification for both premium and mass-market products validates our vertically integrated manufacturing capabilities, marking a significant milestone in advancing India's EV vision," a company spokesperson said.
The government's ambitious Auto PLI Scheme is poised to strengthen local supply chains and foster domestic manufacturing. Ola Electric is eligible for incentives for up to five consecutive financial years beginning in Fiscal 2024. The incentive would range from 13% to 18% of the product's "determined sales value" (DSV).
Other electric two-wheeler OEMs that have applied for the government's Auto PLI scheme include legacy firms such as Hero MotoCorp, TVS Motor Company, and Bajaj Auto.
Ola Electric is the only pure-play electric two wheeler maker maker to receive approval under the scheme in India. Others who have received the government's nod to claim incentives from the OEM side, include Tata Motors, Mahindra & Mahindra, and Toyota Kirloskar Motors.