Ola Electric gets govt nod for quarterly battery PLI subsidies till 2031

New Delhi: Ola Electric, which was allotted 20GWh battery-making capacity under the ₹18,100 crore production-linked incentive scheme for advanced chemistry cells (PLI ACC), said it had received approval from the heavy industries ministry for revised timelines, with quarterly incentives of ₹7,240 crore till 2031.

The company is on track to install 6GWh of capacity for nickel manganese cobalt (NMC) and lithium iron phosphate (LFP) batteries by the end of the current quarter, it said in a statement to exchanges.

The revision in timelines, an extension for cell makers under the scheme, assumes importance as the government has disbursed no funds under this 2021 scheme yet. Other beneficiaries under the PLI ACC scheme are Reliance Industries Ltd and Rajesh Exports Ltd.

It was not immediately clear whether Reliance Industries and Rajesh Exports have got similar extensions.

"The revised timeline is more than an extension. It transforms the economics of our cell business by converting an earlier milestone overhang into a five-year, quarterly PLI opportunity of up to ₹7,240 crore. We hadn't factored any incentives into our business projections after overshooting the original timelines. Ola is now well ahead of the government's revised schedule, and enables us to access the full potential of ₹7,240 crore and receive disbursement as soon as next quarter," said Bhavish Agarwal, chairman and managing director, Ola Electric, according to the company's statement to exchanges.

In an email response, the ministry of heavy industries confirmed Ola's statement on Wednesday.

Earlier, the scheme timeline was shorter. Since the awarding of battery capacity in 2022, the government has provided for a 2-year gestation period, after which there will be a 5-year disbursement of incentives as cell makers increase domestic value addition to 60%.

However, the scheme's timeline was disrupted due to a lack of skilled manpower and specialised machinery as well as gaps in technological know-how, the ministry of heavy industries had told Parliament.

Auditor flags reversed penalty provision

Since the start of the 2026 financial year, Ola Electric’s battery plans have fluctuated due to market conditions. While the company initially planned to build the full 20GWh, it decided to limit it to 6GWh, as that capacity was sufficient to meet demand from its automobile and cell businesses. The changing plans had called into question the company's PLI status, as the government had set a 5-year timeline to achieve 60% value addition. Moreover, PLI guidelines also required a committed investment of ₹225 crore per GWh within two years, a timeline that Ola missed.

The company had set aside ₹57 crore as a penalty provision in its balance sheet after the government flagged delays in a March 2025 notice. However, in the April to June results released on 7 August, the company reversed the provision, saying it was confident it would receive a waiver of the penalty.

The company's auditor, BSR & Co., had flagged the reversal of the provision because it was done without final approval.

"OCTPL (Ola Cell Technology Pvt. Ltd) has reversed the entire provision and recognized a corresponding credit within other expenses in the statement of unaudited consolidated financial results and has not created any provision for the quarter ended 30 June 2026 on the basis that it had submitted a request to MHI (ministry of heavy industries) seeking an extension of time for compliance with the investment milestone and a waiver of the related liquidated damages," the auditor said in its report, Mint reported earlier.

As no decision had been communicated by the ministry by 30 June, the auditor said it could not determine whether the reversal was justified.

The ministry of heavy industries, in a review of its annual budget grants by a Rajya Sabha parliamentary panel, had said that Ola Electric had plans to set up 6 GWh capacity under the PLI ACC scheme, according to the department-related Standing Committee on Industry's report on 6 August.

During trading hours on Wednesday, Ola's shares gained up 0.4%, while Nifty Auto declined 0.3%.