Ola Electric Misses Battery Production Deadline Under PLI ACC Scheme; Stock Down 6.8% in Five Sessions
Ola Electric Mobility Limited, the Bhavish Aggarwal-led electric vehicle (EV) company, has failed to meet a key milestone under the Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC), as per a disclosure from IFCI Limited. This setback comes despite government support and incentives under the PLI scheme aimed at boosting domestic battery manufacturing.
The announcement has raised concerns among investors, contributing to a 6.8% decline in Ola Electric’s stock over the past five trading sessions. The company’s failure to commence battery manufacturing at its Gigafactories has led to speculation about delays in its expansion plans.
Ola Electric’s PLI Scheme Setback
Ola Electric had signed the Programme Agreement with the Ministry of Heavy Industries on July 28, 2022, committing to setting up large-scale battery manufacturing facilities under the PLI ACC scheme. However, the company failed to meet Milestone-1 as per the agreement, prompting the Project Management Agency, IFCI Limited, to issue a letter highlighting the non-compliance.
In an exchange filing, Ola Electric acknowledged the issue, stating that they are actively working with the authorities to address it.
“We would like to inform you that we are in receipt of a letter dated March 03, 2025, from IFCI Limited regarding the non-achievement of Milestone-1. The company is actively engaged with the relevant authorities in this regard and in the process of filing an appropriate response,” Ola Electric said in a BSE filing.
Despite the company’s reassurance, the missed deadline has fueled uncertainty over Ola Electric’s ability to scale up its battery production. This is particularly crucial as battery production is a key component of its long-term EV strategy.
Stock Market Reaction and Performance
Following the announcement, Ola Electric’s stock price has faced selling pressure, declining 6.8% in the last five trading sessions. However, on Tuesday, the stock managed to close 1.4% higher at ₹55.95, recovering slightly from its previous close of ₹55.18.
Key Stock Price Highlights:
- Current Price: ₹55.95
- Intraday High (March 4, 2025): ₹56.70
- Intraday Low (March 4, 2025): ₹53.57
- 52-Week High: ₹157.53 (August 20, 2024)
- All-Time Low: ₹53.57 (March 4, 2025)
- Year-to-Date (YTD) Performance: -35.12%
- Post-IPO Performance: -38.64%
Ola Electric’s stock, which was listed on Dalal Street in August 2024, has struggled to maintain its listing price. Since its peak of ₹157.53, the stock has witnessed a sharp correction, reflecting investor concerns over execution risks and broader market trends.
Investor Concerns and Market Sentiment
The missed milestone raises questions about Ola Electric’s ability to meet its ambitious battery production targets. The PLI ACC scheme was designed to promote domestic manufacturing and reduce dependence on imported batteries, making Ola’s participation crucial.
Key Concerns for Investors:
- Delay in Battery Manufacturing – Without an in-house battery production unit, Ola Electric may struggle with supply chain disruptions.
- PLI Incentive Risk – Non-compliance with the programme agreement could impact Ola’s ability to receive government incentives.
- Stock Price Volatility – The stock’s downward trend signals a lack of confidence among investors.
- Competitive Pressure – Rivals like Tata Motors and Ather Energy continue to strengthen their EV strategies, potentially gaining a competitive edge.
Industry analysts believe that if Ola Electric fails to address the concerns promptly, it could impact the company’s long-term profitability and market valuation.
Financial Ratios and Performance Metrics
| Metric | Value |
|---|---|
| Current Stock Price | ₹55.95 |
| Market Capitalization | ₹XX,XXX crore (to be updated) |
| 52-Week High | ₹157.53 |
| 52-Week Low | ₹53.57 |
| YTD Performance | -35.12% |
| Post-IPO Performance | -38.64% |
| PE Ratio | XX (to be updated) |
| Debt-to-Equity Ratio | XX (to be updated) |
| EPS (Earnings Per Share) | XX (to be updated) |
(Note: Some financial metrics will be updated based on the latest filings.)
What’s Next for Ola Electric?
While Ola Electric has assured that it is working with the authorities, the missed deadline puts additional pressure on the company to accelerate its battery manufacturing plans. The coming weeks will be crucial in determining whether the company can regain investor confidence and maintain its position in the growing EV market.
If Ola Electric successfully addresses the regulatory concerns and provides a clear roadmap for its battery production, it could stabilize its stock price. However, further delays or lack of communication could result in continued stock price volatility and loss of investor trust.
Final Thoughts
Ola Electric’s failure to meet the PLI ACC scheme deadline has created uncertainty in the market. Despite being a major player in the Indian EV sector, the company’s inability to start battery production raises concerns about execution risks. The stock’s downward trend reflects investor apprehension, and unless Ola Electric provides clarity, the pressure on its share price may continue.
With competition in the EV sector intensifying, timely execution of key projects will be critical for Ola Electric’s growth. Investors and stakeholders will closely watch the company’s next steps in addressing the regulatory concerns and setting up its battery production facility.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.