Government Incentive Offers Timely Support

Ola Electric Mobility Limited has received a significant regulatory and financial boost after the Ministry of Heavy Industries (MHI) approved incentives worth ₹366.78 crore under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components for FY25.

The company disclosed in a regulatory filing dated December 25 that the sanction order was issued to its wholly owned subsidiary, Ola Electric Technologies Private Limited. The incentive amount is linked to the company’s Determined Sales Value for the financial year ended March 2025 and will be disbursed via IFCI Limited, the implementing agency for the scheme.

This approval strengthens Ola Electric’s balance sheet at a time when the broader electric two-wheeler market is becoming increasingly competitive.

Manufacturing Growth, Market Share Pressure

On the operational front, Ola Electric continues to scale manufacturing output. Annual deliveries rose to 3,59,221 units in FY25, up from 3,29,549 units in FY24, reflecting steady year-on-year growth.

However, monthly sales trends indicate mounting pressure. According to Vahan registration data, Ola Electric slipped to fifth position in electric two-wheeler sales in November 2024. Established players such as TVS Motor Company have reclaimed leadership, aided by deeper service networks and long-standing consumer trust.

The data suggests that while Ola’s factory output is improving, translating production strength into sustained market leadership remains a challenge.

Revenue Decline and Investor Nervousness

Financially, the company is navigating a volatile phase.

In Q2 FY26, Ola Electric reported a 46% year-on-year decline in revenue, with operations generating ₹690 crore. Despite this sharp fall, the company managed to reduce its net loss to ₹418 crore, compared to ₹495 crore in the same quarter last year. This improvement was driven by aggressive cost rationalisation under Project Lakshya, an internal efficiency programme.

Meanwhile, Ola Electric’s stock has come under pressure, touching fresh lows in recent sessions. Investor sentiment weakened following reports of founder Bhavish Aggarwal’s stake sale. The company clarified that the transaction was personal in nature, undertaken to repay a ₹260 crore loan, and part of a broader move toward a zero-pledge promoter structure.

Betting Big on Vertical Integration

Looking ahead, Ola Electric is positioning manufacturing self-reliance as its long-term lever for profitability. The company is ramping up operations at its Ola Gigafactory and has entered final testing stages for its indigenous ‘Bharat Cell’ battery technology. Commercial rollout is expected in FY26.

Management believes that in-house battery cell production and deeper vertical integration will structurally reduce costs and help the auto segment move toward EBITDA profitability in the coming fiscal year.

The Bigger Picture

The ₹366.78 crore PLI incentive provides crucial breathing room for Ola Electric, reinforcing the government’s support for domestic EV manufacturing. However, declining revenues, intensified competition, and shifting consumer preferences underline that incentives alone will not secure leadership.

For Ola Electric, the next phase hinges on execution; Turning manufacturing scale, cost control, and technology ownership into sustained market confidence and profitability.