Ola Electric’s Battery Setback Triggers 6.8% Stock Dip Over Five Sessions

Ola Electric Mobility Limited, the electric vehicle (EV) company led by Bhavish Aggarwal, announced on Tuesday, March 4, that it had failed to meet the deadline for signing the “Programme Agreement” under the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage. This agreement was supposed to be finalized between the Ministry of Heavy Industries and Ola Electric’s wholly-owned subsidiary.

The delay comes despite the company being selected under the PLI ACC scheme, which aims to boost domestic battery manufacturing and reduce reliance on imports. The government had set specific timelines for beneficiaries to sign agreements and start production, but Ola Electric has been unable to meet this requirement. The company has not yet disclosed the exact reasons for the delay or provided a revised timeline for compliance.

The missed deadline raises questions about the company’s battery production plans, which are crucial for its long-term strategy in the EV sector. Ola Electric has been working towards developing its own battery technology as part of its vision for an integrated EV ecosystem, but this setback may impact its production roadmap.

In an official letter, IFCI Limited, the designated project management agency for the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, revealed that Ola Electric Mobility Limited has not yet commenced battery manufacturing operations at its Gigafactories. This comes despite the financial and policy support provided under the PLI scheme, which was introduced to promote domestic battery production and reduce dependency on imports.

The disclosure raises concerns about the progress of Ola Electric’s ambitious battery production plans, which are a key component of its long-term vision for the electric vehicle (EV) ecosystem. Under the PLI ACC scheme, companies awarded incentives are expected to adhere to specific timelines for setting up manufacturing facilities and beginning production. However, Ola Electric has not yet met these requirements.

In response to this development, the company, in an exchange filing, stated that it is actively engaging with the relevant authorities to address the situation and provide an appropriate response. While no specific reasons for the delay have been disclosed, Ola Electric has assured that it is working towards resolving the matter in coordination with government agencies.

Ola Electric Mobility Limited, in an official filing with the Bombay Stock Exchange (BSE), acknowledged receiving a letter from IFCI Limited on March 3, 2025. The letter pertained to the company’s inability to achieve “Milestone-1” as per the schedule outlined in the Programme Agreement signed on July 28, 2022, under the government’s Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage. In response, Ola Electric stated that it is actively engaging with the relevant authorities and is in the process of filing an appropriate response to address the matter.

Despite the concerns raised regarding its compliance with the PLI scheme’s timelines, an Ola Electric spokesperson told the news agency PTI that the company had commenced trial production at its Gigafactory in March 2024. Furthermore, it successfully obtained the Bureau of Indian Standards (BIS) certification for its lithium-ion cells in May 2024. The spokesperson reaffirmed that commercial production of its lithium-ion cells is set to begin in the first quarter of the financial year 2025-26 (Q1 FY26), emphasizing that the company remains on track to meet its previously announced timelines.

Additionally, the spokesperson highlighted that Ola Electric is poised to become the first company in India to commercially manufacture lithium-ion cells under the government’s ACC PLI scheme. This development aligns with the company’s broader strategy of establishing a strong domestic battery manufacturing ecosystem, which is expected to play a crucial role in advancing the country’s electric vehicle (EV) industry.

Ola Electric Mobility Limited’s share price saw a modest increase of 1.4% at the end of Tuesday’s trading session, closing at ₹55.95 compared to the previous close of ₹55.18. This upward movement in the stock price occurred despite a generally lackluster performance in the broader stock market. However, it is important to note that the company’s regulatory filing regarding its missed PLI milestone was disclosed after market hours on March 4, meaning its potential impact on investor sentiment was not immediately reflected in the day’s trading activity.

Since its debut on Dalal Street in August 2024, Ola Electric’s stock has experienced significant volatility, with its current price reflecting a decline of 38.64% from its listing price. Furthermore, on a year-to-date (YTD) basis in 2025, the stock is trading 35.12% lower, indicating sustained downward pressure over the past few months. The stock’s performance suggests that investors have been closely monitoring developments related to the company’s business execution, including its progress in the electric vehicle and battery manufacturing sectors.

During Tuesday’s trading session, shares of Ola Electric Mobility Limited experienced fluctuations, reaching an intraday high of ₹56.70 in the early hours of the market. However, the stock also saw a decline, hitting an intraday low of ₹53.57. Notably, the shares opened at a lower price compared to the closing price on Monday, indicating some initial bearish sentiment among investors.