Shares of Ola Electric Mobility bounced back into positive territory on on Wednesday after the company said its subsidiary, Ola Electric Technologies, met the eligibility requirements under the government’s production linked incentive (PLI) scheme for the automobile and auto components sector.

What Happened: Ola Electric said two of its scooter models, the S1 X 3 kWh and S1 X 4 kWh, met the strict minimum localisation requirement of 50% as mandated by the Ministry of Heavy Industries, the company said in an exchange filing filing.

This makes Ola Electric the only two-wheeler and pure electric vehicle (EV) manufacturer to receive PLI certification for four products: S1 Air, S1 Pro and the two S1 X models.

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The company noted that the S1 X 3 kWh and S1 X 4 kWh models together account for nearly half of its revenue. With the PLI certification in place, Ola Electric expects to further improve its profitability.

Big Incentives: The certification was granted after testing and verification of component localisation. Under the PLI scheme, Ola Electric Technologies is eligible for incentives for up to five consecutive financial years, starting from fiscal 2024. These incentives are expected to range between 13% and 18% of the “determined sales value” (DSV) of the products.

Additionally, Ola Electric was awarded a 20 gigawatts-hour capacity under the government's PLI scheme for Advanced Chemistry Cell (ACC) Battery storage in March 2022. The company is eligible to receive incentives under the Cell PLI scheme for five years from the commissioning of the Ola Gigafactory in Krishnagiri, Tamil Nadu.

Price Action: After hitting a new high of ₹157.53 earlier in the Monday, shares of Ola Electric dropped 6.15% to ₹137.38 on Tuesday. However, the stock remains 82% above its IPO issue price of ₹76 per share.

Ola Electric’s shares were up 2.22% at ₹140.86 near the start of trade on Wednesday.

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