The PLI scheme for autos provides incentives in the range of 13-18% of
sales value to OEMs for manufacturing EVs in India, according to an analysis
done by Kotak Institutional Equities.
The boost will occur due to the FAME-II policy (subsidy for consumers)
and PLI scheme for advanced chemistry cell (subsidy for batteries manufactured
in India), along with the PLI scheme for autos. This, in turn, provides a
strong foundation for rapid adoption of EVs in India as incentives now cover
both manufacturers and consumers.
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. According to
brokerages, key beneficiaries in the auto component space will be mostly global
MNCs such as Bosch, Continental, Delphi Automotive, Denso Corporation.
Kotak said that in its own understanding, Minda Industries, Endurance
Technologies, Varroc Engineering, and Schaeffler India can benefit from this
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 scheme 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. Under the scheme, 22
components will be eligible for incentives. The scheme will be effective from
FY 2023 for five years and the base year for eligibility criteria would be FY
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