Most EVs in India Ineligible for PLI Scheme: Only Tata, Mahindra to Get Benefits

Only six out of 46 applicants have met the criteria for the Government of India’s Production Linked Incentives scheme to boost the domestic electric vehicle manufacturing industry. The sourcing of domestic components was found to be inadequate with the majority of cars submitted to the Ministry of Heavy Industries for consideration to be included in the scheme. This highlights a need to develop a better supply chain and overall ecosystem, reducing reliance on imported components.

The PLI scheme specifies a domestic value-add criterion, requiring at least 50 percent of a car’s parts and components be manufactured and sourced locally. There has however been some flexibility when it comes to EV battery sourcing, considering that essential components including rare earth minerals are difficult to mine and refine. India has in recent years pushed to reduce dependence on China in particular, as export controls have badly disrupted Indian vehicle manufacturing operations.

According to a Times of India report, only five cars from Tata Motors and one from Mahindra have been deemed eligible for benefits. These models are the Tata Nexon EV, Tiago EV, Tigor EV, Punch EV, Harrier EV, joined by the Mahindra XEV 9E. Interestingly, the Tata Curvv EV and Mahindra BE 6 have not qualified. 

Companies that reportedly did not make the cut include Hyundai, Kia, JSW MG Motor, Mercedes-Benz, BMW, Audi, Citroën, VinFast, Volvo, and Tesla. It is likely that localisation will increase over time, though challenges remain in terms of market size and infrastructure compared to traditional combustion cars.

India’s local EV battery ecosystem is developing, with multiple companies aiming to produce and package their own lithium ion cells.