Adding to the growing challenges for Ola Electric Mobility, the ministry of heavy industries (MHI) has reportedly issued a notice to the EV major for failing to meet its commitments under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage PLI scheme.

As per ET’s report, Ola Electric will face a penalty of INR 12.5 lakh per day starting January 1, 2025, until it fulfils its commitments under the PLI scheme. Besides Ola, two other companies, including Reliance and Rajesh Exports which were the beneficiaries of the battery PLI scheme, were also issued the notices.

“These notices are aimed at nudging companies towards quickly achieving battery manufacturing targets defined under the PLI programme. The intention of this scheme is not to collect penalties,” the report cited a senior official as saying this. However, the official also informed that the companies can represent their case and seek relaxation on this.

“We have already announced the commercial production of our cells beginning Q1 FY26, and we are well on track to meet the set timelines. Ola Electric will be the first to commercially manufacture lithium-ion cells in India under the government’s ACC PLI scheme,” Ola Electric spokesperson responded on the development.

This programme, with a budgetary outlay of INR 18,100 Cr aims to boost domestic battery manufacturing capacity and reduce reliance on imports. Besides the incentives, the companies were also provided with capacities by the MHI under the PLI Programme.

In 2022, Ola Electric signed an agreement under the ACC PLI scheme to manufacture advanced chemistry cells for EVs. The scheme targets a manufacturing capacity of 50 GWh and emphasises domestic value addition and global competitiveness in battery production.

It is pertinent to note that Ola Electric has been a beneficiary of other government schemes like FAME-II and PM E-Drive that require companies to maintain service centers and provide warranties.

This development coincides with another report of Ola Electric’s Roadster X not being ready for delivery yet due to unresolved technical issues and the pending homologation process. At the time of the bike launch, Bhavish Aggarwal said that the bike series was initially expected to begin by mid March 2025.

The development comes close on the heels of the company facing scrutiny from MHI for service-related issues, including several consumer complaints regarding delayed deliveries, defective vehicles, and poor customer service.

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