Heavy Industries Ministry Notice To Ola Electric, Others For Failing PLI Commitments: Report

Adding to the growing challenges for Ola Electric Mobility, the ministry of heavy industries (MHI) has 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. 

Besides Ola Electric, two other companies such as Reliance and Rajesh Exports were also issued the notices.

With a budgetary outlay of INR 18,100 Cr, the PLI scheme aims to boost domestic battery manufacturing capacity and reduce reliance on imports. 

ET first reported the development. As per the 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. On the other hand, Mukesh Ambani’s Reliance New Energy Limited (RNEL) and ACC Energy Storage (which bid as Rajesh Exports) will pay INR 5 Lakh per day.

“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. However, the official also informed that the companies can represent their case and seek relaxation on this. 

Responding to Inc42’s queries on the development, an Ola Electric spokesperson said, “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.” 

Meanwhile, in an exchange filing today (March 4), Ola informed that it has received a letter from IFCI Limited, the Project Management Agency (PMA) for the PLI ACC scheme saying that Ola Cell Technologies failed to achieve milestone-1 as per the schedule outlined in the programme agreement signed on July 28, 2022.

In a separate filing today, Reliance Industry also acknowledged that its step-down wholly owned subsidiary Reliance New Energy Battery Storage Limited (RNEBSL) received a letter from MHI imposing liquidated damages amounting to INR 5 Lakh per day for delay from January 1, 2025. 

The company also said that this penalty results from the delay in achievement of milestone 1 under the programme agreement executed with MHI for 5 GWh manufacturing capacity awarded under the Performance Linked Incentive Scheme for Advanced Chemistry Cell. 

Reliance also noted that the total liquidated damages as of March 3, 2025 amounts to INR 3.1 Cr and also requested for extension of time to achieve  Milestone 1.

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.

Editor’s note: This story has been updated to include information from Reliance and Ola Electric’s exchange filings which were submitted after the article was published.