PLI scheme for auto sector to build self-sustaining framework for e-mobility industry: SMEV
The scheme for automobile and drone industries is part of the overall announcement of PLI plans for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 lakh crore.RattanIndia Enterprises Ltd, which has an investment in Revolt Motors, said the scheme will incentivise high value advanced automotive technology vehicles and products, and herald a new age in higher technology, more efficient and green automotive manufacturing.The Champion OEM Incentive plan is a sales-value-linked scheme applicable on battery-run EVs of all segments, it added.
Electric vehicle manufacturers' body SMEV on Thursday said the production-linked incentive (PLI) scheme for auto and auto-components will build a self-sustaining framework for the e-mobility industry. The Union Cabinet has on Wednesday approved a Rs 26,058 crore PLI scheme for auto, auto-components and drone industries to enhance India's manufacturing capabilities.
The scheme will incentivise the emergence of advanced automotive technologies' global supply chain in India, with incentives worth around Rs 26,000 crore to be provided to the industry over the next five years. The scheme is especially beneficial for existing large players engaged in the automotive business and new entrants, as it will renew the interest of traditional players and motivate them to invest in the sector, Society of Manufacturers of Electric Vehicles (SMEV) Director-General Sohinder Gill said in a statement. It is estimated that over the five years, the PLI scheme for the automobile and auto components industry will lead to a fresh investment of over Rs 42,500 crore, incremental production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh jobs.
The move will strengthen the manufacturing ecosystem and build a self-sustaining framework for the e-mobility industry, Gill noted. However, he said, most of the existing small and medium OEMs engaged in the EV automotive business and new startups may not be able to qualify for the scheme and will have to operate under the existing norms. Policies supported by fiscal and non-fiscal incentives are the pillars that drive consumer sentiment and accelerate the adoption of new products in the market, he said. The Advanced Chemistry Cell (ACC) and amendments to the FAME II scheme in June have generated a positive consumer response; the same is envisioned on the rolling out of the PLI scheme. We look forward to continuing working with industry players and policymakers to build India as a global EV manufacturing hub, Gill said in the statement. Terming the scheme a “futuristic step” by the government, which will help the automobile industry to be self-reliant, Yatin Gupte, Chairman & Managing Director at Wardwizard Innovations & Mobility Ltd, said, “The scheme aims to enhance India's manufacturing capabilities and will boost the sunrise industry of Electric Vehicles”.
The PLI scheme is going to promote the Indian manufacturers to expand their businesses, he said. “The push for a clean environment and sustainable mobility will help us to raise our targets by a higher percentage and expand operations in global markets. This move will further make this segment stronger with the utilisation of advanced technology and fasten infrastructure,” Gupte added. According to Emkay Global Financial Services, the PLI scheme, along with the already announced plan for Advanced Chemistry Cell and FAME, should support EV penetration and localisation of components. During the initial period, a notable part of the incentives could be passed on by auto companies to their end customers to support the acceptance of EVs, in our view, it stated. “We believe that the existing OEMs, especially in 2Ws, could be negatively impacted by the faster EV adoption, owing to increased competition from startups like Ola Electric. “Ancillaries are likely to benefit from localisation opportunities for both combustion engine parts and battery electric vehicle and fuel cell electric vehicle parts,” it said. The scheme for the automotive sector along with the already launched PLI plans for Advanced Chemistry Cell (Rs 18,100 crore) and Faster Adoption of Manufacturing of Electric Vehicles (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system. The scheme for automobile and drone industries is part of the overall announcement of PLI plans for 13 sectors made earlier during the Union Budget 2021-22, with an outlay of Rs 1.97 lakh crore.
RattanIndia Enterprises Ltd, which has an investment in Revolt Motors, said the scheme will incentivise high value advanced automotive technology vehicles and products, and herald a new age in higher technology, more efficient and green automotive manufacturing.
The Champion OEM Incentive plan is a sales-value-linked scheme applicable on battery-run EVs of all segments, it added. Anjali Rattan Nashier, Business Chair, RattanIndia Enterprises said, “This scheme for the auto industry, with a decided shift to promote clean and green electric vehicles in the country, will help develop the high-tech EV manufacturing ecosystem and will accelerate EV adoption in the country”.
The scheme for the auto sector envisages overcoming the cost disabilities to the industry for the manufacture of advanced automotive technology products in India.
The scheme is open to existing automotive companies and new investors, who are currently not in the automobile or auto component manufacturing business.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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- Society of Manufacturers of Electric
- Ola Electric
- Wardwizard Innovations & Mobility Ltd
- Champion OEM Incentive
- Advanced Chemistry
- Emkay Global Financial Services
- Advanced Chemistry Cell
- Electric Vehicles
- Union Budget 2021-22
- Revolt Motors
- Sohinder Gill
- Anjali Rattan Nashier
- RattanIndia Enterprises
- The Union Cabinet