The government of India has cleared a ₹ 26,000 crore production-linked incentive (PLI) scheme for the auto and drone sector. Out of the Rs 26,058 crore, Rs 25,938 crore has been set for the auto sector and Rs 120 crore for the drones sector, to spice up production of drones, electric vehicles and hydrogen fuel vehicles. in step with the announcement, automobile companies which will invest ₹ 2,000 crore for four-wheelers, and ₹ 1,000 crore for two-wheelers for five years are going to be eligible for the government’s PLI scheme, Minister of knowledge and Broadcasting of India, Anurag Thakur said.
The PLI scheme will benefit existing automotive companies, yet as new investors who are currently not within the automobile or auto component business. the govt, while announcing the scheme, underscored the main target on environmentally cleaner vehicles. The Minister of knowledge and Broadcasting stresses the importance that the PLI scheme will work along with the celebrity II (Faster Adoption and Manufacture of EVs) scheme, to fulfill all requirements of the electrical vehicle ecosystem. Naturally, the reaction from the auto sector, especially those involved within the electric vehicle segment, has been encouraging.
“The revised focus of PLI scheme on alternative fuels, electric vehicles and utilisation of advanced technological innovation, will help the industry move faster towards the longer term technologies. there’s a way of haste in developing these technologies in India and this scheme gives the correct impetus to the industry to maneuver rapidly therein direction. Any country which aspires to guide in an exceedingly particular sector needs government support and this scheme aims to try to to just that within the future mobility space. The pandemic has taught us the essence of Aatmanirbharta in every aspect possible. Hence, this can be a big push by the govt for its workforce, organisations (OEMs), and therefore the consumers to hunt competitive, diverse, and climate conscious mobility solutions and a progressive India,” said Venu Srinivasan, Chairman, TVS Motor Company.
Commenting on the announcement, Naveen Munjal, MD, Hero Electric said, “The recent announcements by the govt of India over the previous few months have helped propel the EV industry onto its next level. the sooner come out amendments to FAME II and added revisions by various states are absolute game changers in bringing down the costs of EVs. With this announcement of allocating a complete of ₹ 26,000 crore to encourage and push adoption of cleaner mobility and technologies, this sector is poised to grow exponentially from here on. The outlay for OEM makers and other incentives on manufacturing auto components that help making transportation cleaner will encourage investments and further drive localisation. this can further help bring down the value of producing thereby benefiting the patron, the industry and therefore the environment. Hero Electric supports the government’s initiative and appears forward to leading the new phase of electrical mobility within the coming years.”
“The scheme aims to reinforce India’s manufacturing capabilities and can boost the industry of electrical Vehicles. The PLI scheme goes to market our Indian manufacturers to expand their businesses. The push for a clean environment and sustainable mobility will help us to lift our targets by the next percentage and expand operations in global markets. This move will further make this segment stronger with the use of advanced technology and fasten infrastructure,” said Yatin Gupte, Chairman and manager, Wardwizard Innovations & Mobility Ltd.
For two-wheeler makers to avail the scheme, the quantity of latest investment required are going to be ₹ 1,000 crore. And for automobile original equipment manufacturers (OEMs) to avail the scheme, they need to have a minimum of ₹ 10,000 crore in revenue and can should make new investments of ₹ 2,000 crore in a very period of 5 years to require benefits from the scheme. Auto component makers must have a world net worth of ₹ 1,000 crore and a transparent business plan for investment in advanced automotive technologies to be eligible for the scheme. Analysts say, it is a win-win situation and can also help bring down costs.
“Yes, i believe within the current market scenario it’ll largely help the two- and three-wheeler segment including the present OEM since they’re also into manufacturing EVs. The scheme with attention on OEM and component manufacturers will benefit the component manufacturers that specialize in advanced automotive engineering. aside from encouraging development, this may also help assisting in bringing down cost to be competitive within the global market,” said V Sridhar of Grant Thornton.
For now, the PLI scheme seems to be focussed on emerging technologies, more specifically coping with the EV sector. a complete of twenty-two components are covered under the auto components PLI scheme, including flex fuel kit, hydrogen electric cell, hybrid energy storage systems and electric vehicles parts, including charging ports, drive train, electric air pump, and electric compressors.
