The Ministry of Heavy Industries (MHI) has reportedly granted IPO-bound Ola Electric approval for subsidies under the production-linked incentive (PLI) scheme.
This makes Ola Electric the first Indian electric two-wheeler (e2W) company to gain certification under the PLI scheme. The certification by the ministry was reportedly granted on 27 December and the entire process took four months.
The PLI scheme offers monetary rewards to corporations with the dual aim of enhancing local production and decreasing reliance on imports, thereby making products more competitively priced.
Moneycontrol reported quoting sources that Ola Electric has successfully fulfilled the eligibility criteria, including a minimum of 50 per cent domestic value addition in its vehicles.
The PLI certification could reportedly 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.
Ola Electric, the manufacturer of electric scooters, is planning to raise Rs 5,500 crore through its initial public offering (IPO). In addition, current shareholders intend to offload stock worth Rs 1,750 crore via an offer for sale (OFS).
Holding a 33 percent market share, Ola Electric currently leads the electric two-wheeler segment, with TVS Motor, Bajaj Auto, and Ather Energy trailing behind.
It's important to mention that other significant companies such as Hero MotoCorp, TVS Motor Company, and Bajaj Auto have also submitted applications for the PLI scheme.
To be eligible for this scheme, e-scooter startups must make a minimum investment of Rs 1,000 crore.
The Centre sanctioned the PLI-Auto Scheme in 2021, allocating a budget of Rs 25,938 crore for a span of five years.
The primary objective of this scheme is to enhance the local production of Advanced Automotive Technology products, such as electric vehicles and their parts. It offers financial rewards, amounting to 18 per cent of the eligible sales for electric vehicles and their components.
Kuldeep is Senior Editor (Newsroom) at Swarajya. He tweets at @kaydnegi.
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