PLI to invite investments in EV sector
Production Linked Incentive (PLI) Scheme for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. As many as 20 companies including Hyundai Motor India, Suzuki Motor Gujarat, Ashok Leyland, Mahindra & Mahindra (M&M), Hero MotoCorp, Bajaj Auto, Ola Electric Technologies have been approved for the Production Linked Incentive (PLI) Scheme for the automobile sectors.
India must take the giant leap from fossil fuel-based system to EV ecosystem.
Scrutiny to apprehend the two listed below
Fossil fuels are non-renewable energy sources, and they pollute the environment. Fossil fuels are the main driver of global warming and contribute to climate change. Whereas electric vehicles are 100 percent eco-friendly as they run on electrically powered engines. It does not emit toxic gases or smoke in the environment as it runs on a clean energy source. They are even better than hybrid cars as hybrids running on gas produce emissions, thereby contributing to a healthy and green climate.
Saurabh Agarwal, Partner, Automotive Sector, EY, said, “The real benefit of the Auto PLI would be to the successful applicants who are able to achieve the 50% localisation criteria. Industry should watch out for formula with respect to computing 50% localisation (i.e., whether battery cells and semi-conductors which are currently manufactured in India with negligible capacity would be kept out for computing 50% localisation) as it will be a key to determine the successful beneficiaries of the scheme.
The incentives are available to both existing automotive companies as well as new investors. Vehicles powered by traditional internal combustion engines, including those running on petrol, diesel, CNG and ethanol, are also eligible for any new-age technologies they bring to the automotive ecosystem. The scheme has two components — Champion OEM Incentive Scheme and Component Champion Incentive Scheme. The Champion OEM Incentive Scheme is a ‘sales value-linked’ scheme, applicable on battery electric vehicles and hydrogen fuel cell vehicles of all segments. The Component Champion Incentive Scheme is a ‘sales value-linked’ scheme, applicable on advanced automotive technology components of vehicles, completely knocked down/ semi-knocked down kits, and vehicle aggregates of 2-wheelers, 3-wheelers, passenger vehicles, commercial vehicles and tractors.
The automotive PLI scheme is in addition to the Rs 18,100 crore advanced chemistry cell and Rs 10,000 crore Faster Adaption of Manufacturing of Electric vehicles (FAME) schemes. These will enable India to leapfrog from (a) traditional fossil fuel-based automobile transportation system to (an) environmentally cleaner, sustainable, advanced and more efficient electric vehicles-based system.
Minister for Heavy Industries Mahendra Nath Pandey said, “The overwhelming response shows that industry has reposed its faith in India’s stellar progress as a world class manufacturing destination which resonates strongly with Hon’ble Prime Minister’s clarion call of AtmaNirbharBharat – a self-reliant India. India will surely take a huge leap towards cleaner, sustainable, advanced and more efficient Electric Vehicles (EV)based system”
