PLI schemes: Automakers can receive benefits under various PLI schemes

Automakers can get benefits under various performance-related incentive (PLI) programs to lower the selling price, Heavy Industries Minister Mahendra Nath Pandey told ET.

Twesh Mishra in an interview. Edited excerpts:

What is the government’s view on incidents of electric vehicles catching fire?

The Ministry of Road Transport examines the incidents. An independent investigation is underway. I am sure that corrective measures will be put in place once the faults are identified.

The Center has put its full weight behind the LIP programs. What has been the experience so far?

The Automotive and Automotive Components Industry PLI program aims to improve manufacturing capabilities for Advanced Automotive Products (AAP), with a budget outlay of ₹25,938 crore. It attracted a proposed investment of ₹72,850 crore, against the target estimate of ₹42,500 crore. The proposed investment of ₹43,016 crore comes from applicants under the OEM Champion incentive program and ₹29,834 crore from applicants under the Component Champion incentive program. The program will bring additional production of Advanced Automotive Technology (AAT) products of over ₹2.3 lakh crore.

The overwhelming response shows the industry has confidence in India’s progress as a world-class manufacturing destination.

How can PLI help us increase our share in global advanced technology supply chains?

The PLI-Auto program will facilitate the evolution of the automotive industry towards products with higher added value. It also offers incentives of up to 18% to encourage industry to make new investments in the local supply chain of AAT products from the PLI Scheme for Automotive Sector. The program only incentivizes eligible AAT products for which a minimum national added value (DVA) of 50% is achieved. DVA is expected to increase to more than 50% over the life of the program.

Other PLI schemes, such as those for the advanced chemistry cell (

), special steel, large-scale electronics manufacturing, computer hardware and semiconductors, will also contribute to higher DVA for automotive and automotive components.

What could be the reason for a higher than expected investment commitment in the PLI program for automotive and automotive components?

There is a craze for AAT products. The focus on battery-electric vehicles with zero-emission technology and hydrogen fuel cell vehicles is also encouraging. There is an attractive incentive package with this PLI program for the automotive sector. Incentives can also be used under the PLI scheme for Advanced Chemistry Cell (ACC) (₹18,100 crore) and Faster Adoption of Electric Vehicle Manufacturing (FAME) (₹10,000 crore). The benefit of these programs can be bludgeoned to lower the selling price of vehicles and make them more competitive.

When will we be able to see the first batch of vehicles and auto parts produced under this program? How will this affect the cost of the products?

Fiscal year 2022-23 is the first production year for which an approved applicant can claim an incentive on determined sales. Sales of AAT products with a DVA of at least 50% beginning April 1, 2022 would be eligible for the incentive, subject to reaching an investment threshold and specified additional sales.

What changes can be made to better implement FAME?

Under FAME-II, installing charging stations is a challenge. We are in talks with the Ministry of Petroleum to install 22,000 charging stations at the points of sale of petroleum marketing companies.