New Delhi: Indian electric two-wheeler manufacturer Ola Electric has come under federal government scrutiny after failing to meet a key milestone in setting up its planned battery ‘gigafactory’ in Tamil Nadu.
The company confirmed receiving a government notice but did not disclose specific details regarding the missed deadline or potential repercussions.
Ola Electric was selected in 2022 to establish a 20-gigawatt (GW) battery manufacturing facility under India’s ambitious Production-Linked Incentive (PLI) scheme.
The 181-billion-rupee ($2.07 billion) initiative required participating companies to set up production facilities within two years, aiming to enhance India’s domestic battery ecosystem and reduce reliance on imports.
The company had previously stated that commercial operations at the gigafactory would commence by April. However, the recent government communication suggests that Ola has fallen behind schedule.
Ola Electric has faced significant financial hurdles since going public last year, with its market value dropping by nearly 40 percent. Rising costs, weak demand, and aggressive discounting strategies have strained profitability, leading to job cuts as the company attempts to stabilize operations.
Ola Electric is not the only company facing government action over PLI scheme delays. Reliance New Energy Solar Limited, led by Mukesh Ambani, also received a similar notice for missing its project timeline.
It remains unclear what penalties Ola Electric might face or whether it will seek a similar extension. As India pushes for self-sufficiency in battery production, the pressure is mounting on companies to meet their commitments under the PLI scheme.
