The Government Will Shell Out Rs 26,000 Crore Over The Next Five Years To Support The Push Towards Electric Vehicles

The PLI scheme for the auto industry will lead to fresh investments worth Rs 42,500 crore made over the next five years

The Government of India today cleared a PLI (production-linked-incentive) scheme worth more than Rs 26,000 crore for the automobile sector. This is part of a total of Rs 1.97 lakh crore that has been set aside for similar PLI’s in 13 different sectors in the 2021-22 budget.

The investment will be made over the next five years, and will help the industry in overcoming the cost disability for manufacturing advanced automotive technologies. The benefits of the PLI scheme can be availed by new as well as existing component and automobile manufacturers.

According to government estimates, the PLI scheme over the course of next five years will see a fresh investment of over Rs 42,500 crore, and an increase in incremental production of Rs 2.3 lakh crore. It will also generate 7.5 lakh more jobs in the industry.

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The PLI scheme is also segmented into two halves. One half will support the production of battery electric vehicles and hydrogen fuel cell vehicles as a whole, whereas the second half will support component manufacturing.

This latest PLI, coupled with the FAME scheme and another PLI for battery production, is expected to help the Indian automobile industry make the transition to cleaner vehicle technologies, and also help it carve out a bigger piece of the global automotive trade.

Quote from Tata Motors

Shailesh Chandra, President of the Passenger Vehicle Business Unit at Tata Motors, had this to say on the subject: “As a homegrown leading automotive brand in India, we at Tata Motors are delighted to see the new Production-Linked Incentive (PLI) scheme announced today. The government has taken a holistic approach to make India 'Aatmanirbhar', especially in technology areas, that will be relevant and important in future. The scheme promotes manufacturing, export of electric vehicles and those running on hydrogen fuel cells, their supporting infrastructure, as well as new technology auto parts requiring advanced production techniques."

Quote from Mahindra & Mahindra

Rajesh Jejurikar, Executive Director at Mahindra & Mahindra, said, “The Auto PLI scheme is a transformational move that has potential to create a multiplier effect for both clean mobility and also for the economy. It gives Indian firms powerful impetus to be globally competitive in EVs and technology.”

Quote from SIAM

SIAM President, Mr Kenichi Ayukawa said, “SIAM is grateful to the Hon’ble Prime Minister, Hon’ble Minister of Heavy Industries, Secretary Heavy Industries, and all other policy makers in the Government involved in launching the PLI Scheme for the auto industry. The scheme will contribute towards reducing carbon emissions and oil imports with local manufacturing. SIAM will be happy to engage with the Ministry of Heavy Industries for detailing and fine-tuning, execution and further strengthening the scheme.”