March 4 (Reuters) – Indian electric two-wheeler maker Ola Electric (OLAE.NS)received a letter from the federal government on Tuesday for missing a key milestone in the setup of its planned battery “gigafactory”.
Ola was selected in 2022 for the government’s production-linked incentive (PLI) scheme to establish a 20 gigawatts (GW) local battery manufacturing facility in the southern state of Tamil Nadu.
The 181-billion-rupee ($2.07 billion) scheme required companies to set up manufacturing facilities within two years. Ola Electric has previously said it would begin commercial operations at the manufacturing facility by April.
Its Tuesday statement said the company was actively engaged with relevant authorities, but did not offer details about the missed milestone or spell out what steps the government could take next.
Ola Electric has lost roughly 40% of its market value since going public last year, pressured by high costs, weak demand and deep discounts that have led to job cuts in its push for profitability.
Earlier in the day, Mukesh Ambani-led Reliance New Energy Solar Limited also received a similar letter from the federal government for missing its timeline to set up a manufacturing plant under the same scheme.
Reliance said its penalties stood at 31 million rupees ($355,293) as of March 3, and that it had asked the government for more time to set up its manufacturing plant.
It was not immediately clear how much Ola’s potential penalties would be.
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Reporting by Indranil Sarkar in Bengaluru; Editing by Devika Syamnath
