Ola Electric, Ather Shares In Focus As Government Notifies Guidelines For EV Manufacturing Scheme

Shares of Ola Electric Mobility Ltd., and Ather Energy Ltd. rebounded day's losses after the Ministry of Heavy Industries notified detailed guidelines for the "Scheme to Promote Manufacturing of Electric Passenger Cars in India," in a major push to attract global investments and bolster India's electric vehicle ecosystem. The initiative is a part of the government's broader mission to achieve net zero by 2070 and make India a global manufacturing hub for electric vehicles.

Under the scheme, approved applicants will be allowed to import completely built-up electric four-wheelers with a minimum CIF value of $35,000 at a reduced customs duty of 15% for five years from the date of application approval.

The imports will be capped at 8,000 units per year, with unutilised limits allowed to carry over. The total duty foregone under the scheme is capped at the lower of Rs 6,484 crore or the investment made.

To qualify, companies must commit a minimum investment of Rs 4,150 crore within three years. Approved applicants will be required to set up manufacturing facilities and start operations within that time. The scheme also mandates achieving a minimum domestic value addition of 25% within three years and 50% within five years.

The scheme includes provisions for investment in new plant, machinery, associated utilities, and R&D. Expenditure on land will not be considered, though plant buildings and utilities (up to 10% of committed investment) and EV charging infrastructure (up to 5%) will qualify.

Applicants must provide a bank guarantee equivalent to the higher of Rs 4,150 crore or the total duty to be foregone. The scheme requires a non-refundable application fee of Rs 5,00,000, with the application window to remain open for 120 days or more, until March 15, 2026.

Eligibility criteria include a minimum global automotive revenue of Rs 10,000 crore and a fixed asset investment of Rs 3,000 crore. The detailed notice will soon be available on the Ministry of Heavy Industries' website.

Shares of Ola Electric rose by 4.40% intraday to reach Rs 53.20. Ather Energy also reversed the day's losses, advancing 1.26% to Rs 316.95. Both these companies had earlier traded as low as 2.47% and 3.83%, respectively. Mahindra & Mahindra Ltd. also performed well, rising 2.07% intraday to Rs 3,038.50 apiece.

Tata Motors Ltd. and Bajaj Auto Ltd. bucked the trend, falling 0.83% to Rs 713.50 and 1.17% to Rs 8,506.50, respectively.

The Nifty Auto index was trading 0.15% higher, near day's highs, as compared to a 0.15% decline in the benchmark NSE Nifty 50 as of 2:00 p.m.