Ola Electric's auditor has raised concerns over the company's June quarter financial results after it reversed a ₹57 crore provision for penalties related to the government’s battery cell production-linked incentive (PLI) scheme. The company’s request for an extension to meet investment milestones and a waiver of penalties is still pending approval, according to livemint.com.
Ola Electric was selected for the PLI scheme four years ago and was required to invest ₹225 crore per gigawatt hour (GWh) of capacity awarded within two years. The company missed this timeline, leading to the imposition of penalties. Despite this, Ola Electric reversed the penalty provision in its financial statements, prompting the auditor to flag the move as a red flag in the June quarter results.
The battery cell PLI scheme aims to boost domestic manufacturing capacity in India’s electric vehicle sector by incentivizing investments. Ola Electric’s delay in meeting the stipulated investment targets and the subsequent reversal of penalty provisions highlight challenges in compliance and financial reporting within the sector. The issue underscores the scrutiny companies face when participating in government incentive programs, especially in emerging industries like electric mobility.
The auditor’s red flag on Ola Electric’s financials was reported on August 10, 2026, by livemint.com, marking a significant development in the company’s ongoing compliance with the PLI scheme requirements.