Revamping PLI Scheme: A Boost for Electric Vehicle Adoption

Deloitte India highlights the need for changes in the Production Linked Incentive (PLI) scheme for automobiles to tackle barriers facing EV manufacturers in India. By relaxing steep norms and easing investment thresholds, the scheme could witness greater participation and foster green mobility adoption in the nation.

Amid the anticipation of revisions to the Production Linked Incentive (PLI) scheme for automobiles, experts from Deloitte India underline that alterations could significantly benefit electric vehicle manufacturers. The current scheme, aimed at promoting advanced and zero-emission vehicles, has only seen limited success due to various barriers.

According to Sheena Sareen, Partner at Deloitte India, only a fraction of the over 200 applicants have qualified for incentives under the current guidelines, which demand nearly 50 percent domestic value addition. This high bar poses a challenge due to the scarcity of locally produced critical components, such as batteries and rare earth magnets.

Moreover, the scheme's requirement for a minimum investment of Rs 2,000 crore over five years for four-wheelers further complicates participation, particularly for smaller firms and startups. Sareen suggests that amending these constraints, akin to modifications in other PLI sectors, would enhance participation and drive the sector towards sustainable growth.

(With inputs from agencies.)