Mumbai
Government’s productivity linked incentive (PLI) scheme for auto and component industry is set to change it in a big way through electric vehicles (EV), new technologies and new players in the market.
Sources indicated that large auto players such as Hyundai, Tata Motors, Maruti Suzuki have already started studying their production plan keeping in mind the PLI scheme. Several smaller players and the startups, who have just recently begun their journey in the EV space, have also begun discussions to push up production in line with the PLI scheme.
An analysis done by Kotak Institutional Equities that the PLI scheme would see rapid adoption by the EV segment, especially two-wheelers and incumbents will have to step up. For auto component manufacturers, the government will provide incentives in the range of 8-13% with an additional 5% incentive for manufacturers of battery cell and hydrogen fuel cell components.
The commercial vehicle segment is also steering the opportunity offered under PLI scheme with interest. The government approved the PLI scheme for the auto industry with an outlay of Rs 264 billion. The current PLI scheme is targeted to enable India to leapfrog to EVs and incentivize the emergence of an advanced automotive technologies supply chain in India. The PLI schem for the auto sector is open to existing automotive companies as well as new investors who are currently not in the automobile or auto component manufacturing business.
The scheme has two components, viz. Champion OEM Incentive Scheme — ‘sales value linked’ scheme, applicable on BEVs and hydrogen fuel cell vehicles of all segments, and Component Champion Incentive Scheme - ‘sales value linked’ scheme, applicable on advanced automotive technology components of 2-wheelers, 3-wheelers, passenger vehicles, commercial vehicles and tractors.
The scheme will be effective from FY2023 for five years and the base year for eligibility criteria would be FY2020.
Source: News 18
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