Ola Electric Mobility has secured a ₹95.8 crore incentive under the government’s Production Linked Incentive (PLI) scheme for automobiles and auto components, providing a cash-flow boost to the electric two-wheeler maker as it works to lower its cash burn.
The Ministry of Heavy Industries has sanctioned ₹95.8 crore under the demand incentive component of the PLI-Auto scheme for FY27, with the amount to be released through IFCI, the central nodal agency. This is the second consecutive year Ola Electric has qualified for the incentive, following a ₹366.7 crore sanction for FY25 announced in December 2025.
The latest payout comes at a time when improving cash generation remains a key priority for Ola. The company’s latest financial statements show that the group recorded negative cash flow from operations of ₹215 crore during the June quarter, after negative operating cash flow of ₹775 crore in FY26. Ola attributed this primarily to continued operating losses, lower-than-expected growth in sales volumes and increased material costs.
Ola has said in its financial statements that it expects available liquidity, future cash flows and access to credit to enable it to meet its liabilities as they fall due.
Ola reported consolidated free cash flow of negative ₹351 crore in the June quarter, while the automotive business recorded a cash outflow of ₹123 crore. Against this backdrop, the PLI incentive is set to provide additional liquidity without requiring fresh equity or debt.
The company is simultaneously seeking to reduce its steady-state operating cost base to around ₹300 crore a quarter. Consolidated operating expenses fell to ₹333 crore in the June quarter from ₹428 crore in the preceding quarter, although the latest figure benefited from a roughly ₹55 crore provision reversal. Excluding this, management indicated operating expenses were around ₹380 crore.
Ola delivered 39,192 vehicles in the June quarter, a 94 per cent sequential increase, while consolidated gross margin stood at 30.5 per cent. However, revenue from operations at ₹455 crore remained about 45 per cent below the ₹828 crore reported a year earlier. The company posted a consolidated loss of ₹336 crore. FY26 revenue had fallen about 50 per cent to ₹2,253 crore.
The company’s liquidity position was strengthened last quarter through a ₹780 crore qualified institutional placement (QIP). Ola also had ₹304 crore of unutilised IPO proceeds at June-end.
Brokerage Emkay Research said Ola was taking measures to cut costs and conserve cash but remained cautious about the sustainability of the volume recovery amid intensifying competition.
Ola said the PLI sanction recognised its efforts to scale domestic production, deepen localisation and develop electric vehicle (EV) technology in India. The company manufactures vehicles and critical components, including battery cells, at its Futurefactory in Tamil Nadu.
While the ₹95.8 crore incentive does not materially change Ola’s underlying cash-generation profile, it provides incremental support as the company attempts to bring down operating losses and cash consumption.
