Ola Electric S1 X 3 kWh And 4 kWh EVs Receive Production Linked Incentive (PLI) Eligibility Certification

India’s largest electric two-wheeler brand, Ola Electric, has marked yet another significant achievement with its popular scooters, the S1 X 3 kWh and S1 X 4 kWh. Both of these scooters have received certification for compliance with the eligibility assessment requirements as per the Production Linked Incentive (PLI) Scheme for automobiles and auto components. With this, Ola Electric has become the only two-wheeler pure-play EV manufacturer in India to earn this certification for four of its products, namely – S1 Air, S1 Pro, and the S1 X (3 kWh and 4 kWh).

Ola Electric’s PLI Certification

For those who may not be aware, the PLI certification is a recognition of the company’s adherence to the stringent requirements set by the Ministry of Heavy Industries. Both the S1 X 3 kWh and S1 X 4 kWh scooters have successfully met the minimum localization criteria of 50%.

The Production Linked Incentive (PLI) scheme is a government initiative aimed at enhancing the domestic manufacturing sector. For this, the government provides incentives to companies that meet specific production and localization criteria.

For the automobile and auto components sector, the scheme is designed to encourage companies to increase the use of locally sourced components. This then helps in reducing dependency on imports and ensures the growth of the domestic supply chain.

In the case of Ola Electric, the PLI certification for its S1 X 3 kWh and 4 kWh scooters means that the company has not only met but exceeded the minimum localization threshold required to qualify for these incentives. This achievement is particularly significant for Ola Electric as the S1 X models account for nearly half of the company’s revenue.

The certification is expected to significantly boost Ola Electric’s financial performance, the company added. It has also mentioned that it will allow the company to further improve its bottom line through the incentives offered under the PLI scheme.

PLI Scheme for Ola Electric Scooters

This PLI scheme provides financial incentives ranging from 13% to 18% of the determined sales value (DSV) of the certified products. These incentives will be available to Ola Electric over a five-year period, beginning from Fiscal Year 2024. This means that Ola Electric will have substantial financial benefits in the coming years.

It will not only enhance its profitability but also enable it to reinvest in further innovation and expansion. The certification process, conducted by the Automotive Research Association of India (ARAI), involved rigorous testing of the products. It also involved an in-depth evaluation of the localization of components.

Response to This Announcement

Following the announcement of the PLI certification, Ola Electric’s stock soared 4.41% to Rs 143.80 on the BSE. Despite the volatility, Ola Electric’s shares remain significantly above their IPO issue price. For those who may not remember, Ola Electric’s share issue price was Rs 76. Here are all the details about its IPO.