Teaching Case Study of PLI Auto Scheme Incentive to Ola Electric: For Sustainable Entrepreneurship

Abstract

Source of the case: (Primary / Secondary / No armchair cases) The case study utilised secondary web-based articles to analyse Ola Electric, drawing insights from various news reports and organisational resources found online. This approach ensured a comprehensive overview of the company's strategies, achievements, and alignment with initiatives like the PLI Auto Scheme.

Case outline: The Production Linked Incentive (PLI)-Auto scheme is a significant government initiative aimed at bolstering domestic manufacturing, encouraging advanced automotive technologies, and enhancing India’s global competitiveness. It aims to localise production and drive innovation in electric vehicles (EVs). The Union Cabinet approved this scheme on September 15, 2021, allocating a budget of ₹25,938 crores for a duration of five years, from FY2022-23 to FY2026-27. This scheme provides financial incentives for the domestic manufacturing of Advanced Automotive Technology (AAT) products, including electric vehicles and their components. The goals are to decrease imports, establish local supply chains, generate jobs, and position India as a global hub for auto manufacturing. Additionally, Industrial Finance Corporation of India (IFCI) Limited has been appointed as the financial institution responsible for distributing the PLI scheme incentive, totalling approximately ₹366.78 crore, to Ola Electric under this initiative. Ola Electric reported deliveries of 3,59,221 electric two-wheelers in FY25, up from 3,29,549 units in the previous fiscal. In 2010, ANI Technology Pvt. Ltd., founded by Bhavish Aggarwal along with co-founder Ankit Bhati, launched the website Ola Cab, and in 2015, it became a unicorn. In 2017, they launched a separate entity as Ola Electric Vehicle. Ola Electric was established as a separate entity focusing on electric vehicles. It has successfully fulfilled 50% of the minimum localisation criteria set by the Ministry of Heavy Industry to qualify for the Production-Linked Incentive (PLI) auto scheme. The company received certification from the Automotive Research Association of India (ARAI) and is recognised as the only EV maker to obtain PLI compliance certification for four different products. Sustainable entrepreneurs play a vital role in advancing innovation, particularly within the electric vehicle (EV) sector. Ola Electric exemplifies sustainable entrepreneurship by focusing on the development and market introduction of electric vehicles, which are designed to minimise environmental impact and promote cleaner transportation solutions. Their approach involves innovation not only in product design but also in manufacturing processes to enhance sustainability. Ola Electric is driving technological advancements that align with the UN Sustainable Development Goals, showcasing that businesses can thrive while being environmentally responsible. Ola Electric, for instance, is not just introducing electric vehicles but also enhancing production methods, aiming for higher localisation and reduced carbon footprints. This dual focus helps foster sustainability within the automotive industry while contributing to broader economic goals, such as job creation and self-reliance, in line with initiatives like Aatmanirbhar Bharat.

Learning outcomes of the case:

(1)  How Start-ups can utilise the Government Scheme for expanding growth.

(2)  What is the prerequisite for availing PLI Schemes

(3)  Impact of Government support for the Indian Start-up ecosystem Aatmanirbhar Bharat

(4)  The role of IFCI in granting the PLI Scheme.

(5)  To know the role of Start-ups in Sustainable Entrepreneurship for the growth of the Indian Economy.

(6)  To know the Impact of the PLI Auto Scheme on the share price of Ola Electric.

Decision Dilemma / Discussion point:

(1)  What were the core reasons for Ola Electric applying for the PLI Auto Scheme?

(2)  To know the leadership initiative by the Ola Electric Co- Founder 

(3)  Comment upon the Sustainable Leaders. Hip for Aatmanirbhar Bharat(self-reliance) Indian Economy.

(4)  How does the PLI auto Scheme impact the share price of Ola Electric in BSE and NSE?

(5)  Was the right decision to apply the Production Linked Incentive (PLI)-Auto scheme by the start-up company?

(6)  Comment upon the Make in India driving innovation in the EV segment.

(7)  The role of Sustainable entrepreneurs in manufacturing capabilities and their focus on developing electric vehicle technology in India.

(8)  How has Ola Electric raised funds for its growth and product design?