Whalesbook
PMO Nudge Sparks EV Startup Inclusion in Auto PLI
The Union Ministry of Heavy Industries (MHI) is evaluating the inclusion of emerging electric vehicle (EV) startups in its flagship Production-Linked Incentive (PLI) scheme for the automobile and auto component sector. This consideration comes after a direct push from the Prime Minister's Office (PMO).
Eligibility Hurdles for New Players
Companies such as Ather Energy, River Mobility, and Euler Motors are in focus. These startups either had not commenced operations when the ₹25,938-crore scheme was finalized in 2021 or failed to meet its stringent revenue and net worth thresholds. The scheme, approved by the Union Cabinet, aims to foster India's green mobility goals and advanced automotive technologies.
Industry Body's Role
The Society of Indian Automobile Manufacturers (Siam), the nodal industry body, has been asked for its input. Siam's electric mobility group is scheduled to discuss the matter on January 23. Any decision to reopen the PLI window for these new-age companies requires unanimous consent from the industry lobby group.
Market Growth and Competitive Landscape
India's EV market is experiencing significant growth, with sales projected to surge. Market intelligence firm Mordor Intelligence forecasts the Indian EV market to grow to approximately $110 billion by 2029. The potential inclusion of new players could intensify competition. Experts suggest established automakers might need to reassess capital efficiency and localization strategies, while new entrants could set new benchmarks for execution speed and innovation.
Scheme Mechanics and Past Challenges
The PLI-Auto scheme, operational until FY29, has disbursed ₹2,321.94 crore cumulatively in FY25 and FY26. Eligibility typically requires automakers to have over ₹10,000 crore in revenue or non-automaker EV companies to have at least ₹1,000 crore in global net worth, alongside 50% domestic value addition. Stiff entry criteria have historically kept many companies away.