IPO-bound Ola Electric has received the domestic value addition (DVA) certificate under the production linked incentive (PLI) scheme for automobile and auto component industry, becoming the first Indian two-wheeler manufacturer to get this certification.
In a statement, the Bhavish Aggarwal-led startup said it received the certification after successfully meeting the 50% DVA criteria under the PLI scheme.
The certification was granted by the Automotive Research Association of India (ARAI) after testing the startup’s products for localisation of components.
With this certification, Ola Electric will be eligible for incentives for up to five consecutive financial years, commencing from fiscal 2024. The incentive would range between 13% and 18% of “determined sales value” (DSV), the startup said.
“The PLI certification is a testament to our vertically integrated manufacturing capabilities and a significant milestone in our quest to accelerate India’s journey towards clean mobility. The government’s auto PLI scheme will certainly go a long way in localising supply chains and boosting domestic manufacturing while also helping companies achieve economies of scale,” a spokesperson of the startup said.
The government launched the INR 25,938 Cr PLI scheme for automobile and auto components in 2021 to boost domestic manufacturing and promote clean mobility in the country. Besides Ola Electric, the likes of Hero MotoCorp, TVS Motor, and Bajaj Auto have also applied for the PLI scheme.
Earlier this week, the Ministry of Heavy Industries said that Mahindra & Mahindra, Tata Motors, and Ola Electric have received DVA certifications from testing agencies for their products.
Besides the PLI scheme for auto, Ola Electric has also been awarded 20 GWh capacity by the government under the PLI scheme for advanced chemistry cell (ACC) battery storage. The startup is eligible to receive incentives under the scheme over a five-year period from the date of commissioning of the Ola Gigafactory in Krishnagiri, Tamil Nadu.
In its DRHP, filed last month, Ola Electric said that the Gigafactory will become operational this year. The company is looking to raise over INR 7,000 Cr in its initial public offering (IPO), through fresh issuance of shares and offer for sale.
In the DRHP, Ola Electric mentioned its dependence on government subsidies as a key risk to its business.
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