Ola Electric First To Receive PLI Certification For Four Models

Ola Electric Mobility Ltd. has received production-linked incentives certificates for its mass market scooters. This certification makes the Bhavish Agarwal-led EV maker the first company to get four products certified under the Auto PLI Scheme, the company said.

This will incentivise electric vehicles production on the company's entire portfolio of electric scooters. The company met the stringent minimum localisation criteria of 50% for the components used in its electric two-wheelers.

Under the scheme, Ola Electric is eligible for incentives for up to five consecutive financial years commencing from fiscal 2024.

Currently, under the Auto PLI Scheme, incentive would range between 13% and 18% of the determined sales value. There are a total of 87 companies that have been approved under Auto PLI and Component schemes, which require the companies to take separate approval for each product or component. There needs to be at least 50% Domestic Value Addition.

Within the two-wheeler ecosystem, Bajaj Auto Ltd. has already started recognising the PLI benefits starting this quarter. The PLI incentives were recognised for two of the five EVs in the first quarter of fiscal 2025, which aided the company's Ebitda margin by around 50 bps.

TVS Motor Co. is also approved under the Auto PLI Scheme. However, PLI benefits have not reflected in numbers yet, it said in its first quarter conference call. It will potentially recognise these benefits from second quarter.

In the first quarter of fiscal 2025, the company delivered roughly 1.25 lakh electric scooters. Of this, 40% of the scooters were sold in the mass category, specifically the Ola S1 X. The premium S1 Air and S1 Pro scooters, which form 60% of total EV sales for the company, received incentives under the Auto PLI Scheme earlier.

For fiscal 2024, the company reported sales of 3.29 lakh vehicles, more than double from the previous fiscal year.

Currently, incentives under the new EMPS and PLI Incentives contribute roughly 13-14% of total revenues, the company had said in its first quarter conference call. This will aid profitability going forward as well.

Ola Electric's overall loss expanded in the first quarter of fiscal 2025. However, the adjusted gross margin improved, especially in the automotive business.

While consolidated revenues grew 34% to Rs 1,718 crore, gross margins improved by 123% to Rs 377 crore. Adjusted gross margins as a percentage of revenue improved to 21.9% versus 13.2% year-on-year.