Auto PLI Scheme Shifts Dynamics in Electric Two-Wheeler Market

The auto PLI scheme has boosted production in India's electric two-wheeler sector but has also altered market competition. PLI-approved manufacturers gain a cost advantage, capturing domestic market share while non-PLI manufacturers face decline. A new report warns this could undermine innovation and hurt long-term competitiveness.

The auto PLI scheme, aimed at scaling production in the electric two-wheeler sector, has substantially altered competitive dynamics, according to the Centre for Digital Economy Policy Research (C-DEP).

The scheme benefits PLI-approved manufacturers with a 13-16% cost advantage, enabling aggressive pricing strategies domestically. However, while these approved models hold a cost advantage, their export performance lags behind non-PLI models, which account for 77% of India's electric two-wheeler exports.

C-DEP highlights the risk of stifling innovation-driven companies, urging policymakers to rethink the support structure to bolster India's global position in clean mobility technologies.