This is the first payout from the PLI Auto plan since it was introduced in 2022, providing two of India's top green mobility companies with a significant cash boost.
Tata Motors received subsidies for the Tiago EV, Starbus EV, and Ace EV, while Mahindra received incentives for its electric three-wheelers.An important milestone for the program, which had a slow start, was reached Thursday when Tata Motors Ltd. and Mahindra and Mahindra Ltd. became the first manufacturers in India to obtain production incentives for the automotive industry.
According to the heavy industries ministry, the two businesses have been given approval for claims totaling ₹246 crore under the Production-Linked Incentive (PLI) Auto scheme.
Tata Motors gained approval for incentives based on sales of its electric cargo vehicle Ace EV, Tiago EV electric car, and Starbus EV electric bus, while Mahindra and Mahindra's Last Mile Mobility division was approved for incentives based on sales of its electric three-wheelers.
"The total claims from these two applicants amount to approximately ₹246 crore, which have been examined and recommended by the Project Management Agency (PMA) and subsequently approved by the Ministry of Heavy Industries (MHI)," according to a statement issued by the ministry of heavy industries.
Momentum in policy
Two of India's top green mobility companies will receive a significant financial boost from this scheme's first payout since its inception in 2022. This significant event occurs as India works to establish itself as a global center for EV manufacturing.Despite this, the plan has started slowly. According to a Mint report on November 15, the majority of the claims for FY24 came from producers of electric two- and three-wheelers, with a modest total of ₹500 crore from four applications.
According to the ministry statement, Mahindra & Mahindra claimed ₹ 104.08 crore and Tata Motors sought incentives totaling ₹ 142.13 crore based on their estimated sales figures for FY24. Together, the two's claims account for a significant percentage of all FY24 filings. According to two people with knowledge of the situation, Ola Electric and Toyota Kirloskar Auto Parts had also filed claims for FY24 in addition to the two automakers.
Mahindra's assertions are supported by ₹800.59 crore in sales of advanced automotive technology (AAT), which the PLI incentivizes.according to the announcement, with a total investment of ₹978.30 crore. "The eligible sales from their e3W models—including Treo, Treo Zor, and Zor Grand—amount to ₹836.02 crore, supported by a certificate of DVA issued by the Automotive Research Association of India (ARAI)," said the statement. According to the MHI announcement, Tata Motors' eligible sales of AAT amount to ₹1,380.24 crore.
High-tech, regional value
With a ₹25,938 crore investment, the PLI-Auto program seeks to encourage the development of cutting-edge automotive technology, such as electric and hydrogen fuel-cell automobiles. But up until now, its adoption has been quantified. However, as more locally produced electric cars and larger vehicles hit the market, industry insiders predicted that bigger incentives will be offered in the upcoming years.
According to an official speaking on condition of anonymity, "Disbursements for FY24 mark an important moment for the scheme." "As more products satisfy certification requirements, we anticipate an exponential increase in claims by FY26, ultimately using the full fund allocation by FY28."
Green Drive
Following a thorough examination of their arguments, Mahindra and Tata Motors were given approval. In addition to obtaining domestic value addition certificates, manufacturers are required to demonstrate that a minimum of 50% of the vehicle's components were produced locally. This is due to the program's goal of encouraging domestic production of cars and auto parts.
Both Mahindra, a top manufacturer of electric three-wheelers, and Tata Motors, the country's largest producer of electric passenger cars, have been aggressive in expanding their green mobility initiatives.
Emails to the heavy industries ministry, Mahindra & Mahindra, and Tata Motors went unanswered.
However, industry players remain optimistic despite the scheme's delayed start. According to experts, these early payments show the government's dedication to supporting regional production and creating a strong EV ecosystem.
In a written response to Parliament last December, the ministry stated that the government would begin crediting incentives under the ₹26,000 crore production-linked incentive plan for cars and auto components starting in FY25.
In addition to congratulating the two automakers, Union Minister of Heavy Industries HD Kumaraswamy confirmed that other applicants who have received DVA certificates of at least 50% under the PLI-Auto scheme will shortly start producing cars and auto parts in India, according to the release.
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