Ola Electric, the electric vehicle arm of ride-hailing giant Ola, has become the first Indian two-wheeler EV company to receive certification under the Production Linked Incentive (PLI) Scheme for automobiles and auto components. The scheme, approved by the Union Cabinet in September 2023, aims to boost domestic manufacturing of advanced automotive technology products, including electric vehicles and their components.
What is the PLI Scheme?
The PLI Scheme provides financial incentives of up to 18% of eligible sales for electric vehicles and their components, subject to meeting certain eligibility criteria. One of the key criteria is achieving a minimum of 50% domestic value addition (DVA) to the vehicles, which means that at least half of the cost of production should be incurred within India. The scheme has a budgetary outlay of INR 25,938 crore over a five-year period (FY2022-23 to FY2026-27).
How did Ola Electric qualify?
According to reliable sources within the industry, Ola Electric has successfully met the stringent eligibility assessment requirements outlined in the PLI Scheme, including a minimum of 50% DVA to its vehicles. The certification was conferred by The Automotive Research Association of India (ARAI), following rigorous product testing and scrutiny of the localization standards of components. Ola Electric achieved this certification milestone in an unprecedented timeframe of just under four months, setting a new speed record for any Indian company from the onset of mass production to the receipt of PLI certification.
What are the benefits for Ola Electric?
This certification positions Ola Electric as the sole EV two-wheeler manufacturer eligible for benefits under the PLI auto scheme. Industry experts estimate that the PLI certification will empower Ola Electric to access benefits ranging from INR 15,000 to 18,000 per unit. This financial boost is expected to enhance the affordability of electric vehicles, thereby driving increased penetration of EVs across the country.
What are the implications for the Indian EV industry?
Ola Electric’s historic certification under the PLI Scheme marks a significant step forward in India’s pursuit of sustainable and innovative transportation solutions, positioning the company at the forefront of the burgeoning EV revolution. The company has already launched its flagship product, the Ola S1 electric scooter, which has received an overwhelming response from customers and critics alike. The company claims that the Ola S1 is the world’s most advanced electric scooter, with features such as a 121 km range, a top speed of 115 kmph, a digital key, voice control, and a large boot space. The company also plans to set up a network of over 100,000 charging points across 400 cities in India, making it easier for customers to adopt EVs.
Ola Electric’s achievement also sets an example for other Indian EV companies to follow suit and leverage the PLI Scheme to scale up their production and innovation capabilities. The scheme is expected to create more than 7.5 lakh direct and indirect jobs in the auto sector and generate additional investments of over INR 42,500 crore.