Ola Electric has attained Domestic Value Addition (DVA) certification for its S1 Pro (Gen-2) scooter this week, marking a significant milestone under the Auto PLI Scheme. This achievement positions Ola Electric as the first Indian two-wheeler manufacturer to receive the DVA certificate within the PLI scheme, allowing the company to be eligible for incentives for up to five consecutive financial years, starting from fiscal 2023-24. “The scheme enables Ola Electric to receive incentives for up to five consecutive financial years, commencing in fiscal 2023-24. The incentive would range between 13% and 18% of the determined sales value (DSV) of the products,” stated sources close to the matter.
Reported by Moneycontrol, the certification for Ola Electric’s S1 Pro (Gen-2) scooter follows closely after its previous certification for the S1 Air scooter. Bhavish Aggarwal-led Ola Electric has successfully secured certification for its second product under the PLI scheme, a notable achievement within the electric vehicle industry. “Ola S1 Pro and Ola S1 Air are now eligible for subsidies under the government’s Auto PLI scheme for five years from the date of certification,” according to Moneycontrol’s report.
Ola Electric, which filed its draft red herring prospectus (DRHP) with SEBI for an INR 7,250 Cr IPO in December, has been making strategic moves to solidify its position in the market. The IPO comprises a fresh issue of INR 5,500 Cr alongside an offer-for-sale (OFS) component of INR 1,750 Cr, with major investors such as Softbank, Temasek, Tiger Global, and others participating in the OFS. “The company applied for PLI certification for S1 Pro in the second half of October at ICAT, Manesar and received the certification on February 9, 2024,” as per reports.
The IPO proceeds are earmarked for various purposes, including capital expenditure for the Ola Gigafactory project, investment in research and product development, and repayment of subsidiary Ola Electric Technologies’ indebtedness. Ola Electric’s financial performance has been closely scrutinized, with reported losses of INR 1,472 Cr in FY23, marking a significant increase from the previous fiscal year. “During the same period, revenues from operations jumped more than 7X YoY to INR 2,630 Cr FY23 as against INR 373.4 Cr in FY22,” the company disclosed.
The financial numbers for the first quarter (Q1) of FY24 depict further insights, with losses standing at INR 267.1 Cr against an operating revenue of INR 1,242.7 Cr during the period. Ola Electric’s trajectory amidst these financial figures showcases both challenges and opportunities in the evolving electric vehicle landscape.
