Ola Electric Mobility has received a stimulus of 95.8 crore rupees under the government's Production Linked Incentive (PLI) scheme for the automotive industry and auto components. This support provides the company with additional liquidity while it works to reduce operating losses and decrease cash burn.
The Ministry of Heavy Industries approved the amount of 95.8 crore rupees under the demand stimulation component of the PLI-Auto scheme for the financial year 27. The payment will be disbursed through IFCI, the central authorized agency. This is the second consecutive year that Ola Electric has been eligible for such a incentive, following the approval of 366.7 crore rupees for the financial year 25 in December 2025.
Receiving this payment comes as improving cash generation remains a top priority for Ola. According to the company's latest financial reports, in the June quarter, the group recorded a negative cash flow from operating activities of 215 crore rupees, compared to a negative operating cash flow of 775 crore rupees for the financial year 26. Ola attributed this primarily to ongoing operating losses, lower-than-expected sales growth, and increased material costs.
In its financial documents, Ola stated that available liquidity, future cash flows, and credit access will enable it to meet its obligations as they fall due. In the June quarter, consolidated free cash flow was minus 351 crore rupees, and the automotive business showed a cash outflow of 123 crore rupees. Under these circumstances, the PLI incentive is intended to provide additional liquidity without the need to raise new equity or debt.
The company is simultaneously aiming to reduce its fixed operating cost base to approximately 300 crore rupees per quarter. Consolidated operating expenses decreased to 333 crore rupees in the June quarter compared to 428 crore rupees in the previous quarter, although the latter figure was due to an approximate 55 million rupee reserve write-off. Excluding this, management reported that operating expenses were around 380 crore rupees.
In the June quarter, Ola delivered 39,192 vehicles, representing a sequential increase of 94 percent, while the consolidated gross margin stood at 30.5 percent. However, operating revenue of 455 crore rupees remained about 45 percent below the 828 crore rupees reported a year earlier. The company recorded a consolidated loss of 336 crore rupees. Revenue for the financial year 26 dropped by approximately 50 percent to 2,253 crore rupees.
The company's liquidity was strengthened last quarter through a Qualified Institutional Placement (QIP) of 780 crore rupees. Additionally, as of the end of June, Ola had 304 crore rupees in unused IPO funds.
Brokerage firm Emkay Research noted that Ola is taking measures to cut costs and conserve cash, but remains cautious about the sustainability of volume recovery amid intensifying competition. Ola stated that receiving the PLI incentive confirms its efforts to scale up domestic production, deepen localization, and develop electric vehicle (EV) technology in India. The company manufactures vehicles and critical components, including battery cells, at its Futurefactory in Tamil Nadu.
Although the 95.8 crore rupee incentive does not significantly alter Ola's basic cash generation profile, it provides supplementary support in the company's attempt to reduce operating losses and cash consumption.