Latest news with #PLI-Auto
Mint
3 days ago
- Automotive
- Mint
Hero MotoCorp gets approval for PLI-Auto scheme
New Delhi: Hero MotoCorp Ltd, India's biggest two-wheeler maker by sales, has received approval for its electric scooter to be a part of the ₹ 25,938 crore production-linked incentive scheme for automobiles and auto parts (PLI-Auto), according to the scheme's portal. The approval from testing agencies came on 8 July for the VIDA V2 Pro model, which allows the company to claim incentives from the ministry of heavy industries. The approval makes Hero MotoCorp the fourth electric two-wheeler maker in the PLI roster, after Ola Electric Mobility Ltd, TVS Motor Co. Ltd, and Bajaj Auto Ltd. Also read | Govt names Toyota Kirloskar as first component maker to get auto PLIThe PLI-Auto scheme has been integral to boost the margins of electric vehicle makers in the country. Vivek Anand, chief financial officer, Hero MotoCorp Ltd, said during the company's earnings call on 14 May that its efforts to reduce Bill of Materials (BOM) costs through localization, along with the PLI benefit that the company will receive, will make the company's operations profitable. He said then that the company is in the process of applying for PLI sops for multiple models, and was expecting an approval by July. Hero MotoCorp is the 17th company to get its models approved under the scheme, and has initiated the process to get other models approved. Hero MotoCorp recorded a 175% rise in sales of its electric Vida scooters to reach 48,674 units during the year, Mint reported in May, citing data from the Federation of Automobile Dealers Associations (FADA). Also read | Electric journey helps Tata Motors, Mahindra become first to win auto PLIThe company had a 4.2% market share among electric two-wheelers in FY25, according to the Vahan portal, the central registry of vehicles. Disbursals under the PLI-Auto scheme have been low, with about ₹ 322 crore doled out to approved companies in FY25. While 16 companies had been approved for PLIs before Hero MotoCorp, only four had received these payouts till FY25. Tata Motors and Mahindra & Mahindra were granted about ₹ 246 crore in January 2025, followed by ₹ 73.74 crore to Ola Electric in March. The ministry of heavy industries said on 26 March that Toyota Kirloskar Auto Parts had also received disbursals, but did not disclose the amount. An uptick is expected in FY26, union heavy industries minister H.D. Kumaraswamy told Mint in June. The minister had said the government is expecting PLI claims worth about ₹ 2,000 crore from nine companies in FY26. Under the marquee scheme to support the production of zero-emission vehicles, manufacturers receive 13-18% of their incremental sales as kickbacks. Manufacturers have to procure at least 50% of the components locally. While key manufacturing components such as cells for electric vehicles have to be imported, others can be sourced from Indian auto components makers. Also read | About 12 companies including BHEL and Kia Motors to be excluded from Auto PLI Manufacturers also have to meet investment targets under the scheme, or face removal, according to PLI-Auto guidelines. Incumbent vehicle makers must have annual revenues of at least ₹ 10,000 crore and invest ₹ 3,000 crore in fixed assets. For component makers, the thresholds are ₹ 500 crore in revenue and ₹ 150 crore in investment. New entrants from outside the auto sector need a global net worth of ₹ 1,000 crore and must commit investment over five years. The continued addition to the roster of PLI-approved auto products comes as sales of electric vehicles have risen about 17% in FY25 to over 1.9 million, compared with about 1.6 million in FY24.
Mint
6 days ago
- Automotive
- Mint
India to assess easing auto localisation norms after Chinese rare earth magnet crisis
For automakers fretting about the potential loss of incentives if they import fully built motors to skirt China's magnet export curbs, relief may be at hand. The Centre has asked testing agencies to check whether strict localization norms to claim incentives can be relaxed, three people aware of the development said. The heavy industries ministry has also asked these agencies to assess the likely impact of such a move, the people said on the condition of anonymity. 'The testing agencies have been asked to assess the potential impact on manufacturers and their localization, their domestic value addition (DVA). The Automotive Research Association of India (ARAI) will do the assessment to see if relaxations are necessary," one of the three people cited above said on the condition of anonymity. ARAI is an autonomous testing and certification agency set up by the automotive industry along with the government, and affiliated with the heavy industries ministry. Vehicles must have specific amounts of domestic content to be eligible for central incentives. With the Chinese clampdown on exports of rare earth magnets used in motors, automakers have considered importing fully-built motors instead, but that would breach the localization norms and cut off incentives; to avert this, the manufacturers had approached the Centre for relief. Four testing agencies—ARAI, International Centre for Automotive Technology (ICAT), Global Automotive Research Centre (GARC), and National Automotive Test Track (NATRAX)—have been notified under the schemes to assess localization levels and other criteria for manufacturers to claim benefits. The two central subsidy schemes are the Production Linked Incentive Scheme for Automobile and Auto Components (PLI-Auto) as well as the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) scheme to subsidize electric mobility. Under the PLI-Auto scheme, 50% of the components used in a vehicle must be made in India. Implementation issues While the extent of the relief sought is still being discussed, even a temporary relaxation—as sought by the auto industry—would have a significant impact. The PM E-DRIVE scheme is set to lapse in less than nine months, making even short-term relief a big part of the scheme. On the other hand, the PLI-Auto scheme has a very high bar for localisation, making any deviation a major change in the way the scheme operates. One expert indicated that a revision of the norm could be tough to implement. "It is not easy to relax localization norms because you don't know where to stop and when to revert. Timeline relaxation can be considered, but a full localisation norm relaxation is difficult," said an industry consultant working with auto manufacturers. Even importing fully built motors may prove to be costly, apart from increasing reliance on China. According to Harshvardhan Sharma, group head for auto tech and innovation at Nomura Research Institute Consulting & Solutions India, the disruption in rare earth magnet supply—particularly neodymium-iron-boron (NdFeB) magnets—is increasingly forcing Indian automakers to look at importing fully assembled traction motors. 'This shift is both a cost and strategic concern," said Sharma. He said fully built motors attract a basic customs duty of 10% to 15%, whereas magnet imports or motor sub-components may fall within the 2.5-5.0% duty bracket. 'The delta in duties, combined with logistics and markup by motor OEMs, can increase the landed cost of motors by 18-25%," he said. 'Beyond cost, this dynamic increases India's exposure to supply concentration risks, particularly given China's control over 85% of global rare earth refining capacity. India's reliance on fully built motors effectively transfers part of the value chain and technological control offshore." The localisation criteria under PM E-DRIVE follow the phased manufacturing programme and list the components that manufacturers are allowed to import and mandate the ones that are to be made locally. Email queries sent to the ministry of heavy industries and the testing agencies on 14 July remained unanswered. Depleted stockpiles China's clampdown on rare earth magnets has thrown the Indian auto industry into a quagmire. Indian importers of rare earth magnets had rushed to buy the commodity at a premium, ahead of the Chinese curb on exports introduced in April, helping cushion the blow to the industry, Mint reported earlier. With those stockpiles almost depleted and no prospects of fresh magnet imports, Indian automakers are considering importing fully assembled components. Rare earth magnets, such as neodymium-iron-boron (NdFeB) magnets, are used in advanced automotive applications and are essential in components such as traction motors for electric vehicles. The Society of Indian Automobile Manufacturers had written to the ministry on 27 June, asking for a temporary relaxation of localisation norms in various government schemes like the PLI-Auto scheme and PM E-DRIVE, Mint reported on 7 July. The industry had explained the issue to the government and its testing agencies and sought relaxation of localisation norms under the two schemes, a second person aware of the development said. The industry's concern is that importing such assemblies will lower the localisation in zero-emission vehicles made by Indian manufacturers and push them out of the PLI-Auto scheme, the first official said. The scheme's focus on using locally manufactured parts to make zero-emission vehicles is to counter the dependence on the Chinese manufacturing ecosystem for critical components of EVs. The government plans to dole out about ₹2,000 crore in PLI-Auto disbursals in FY26, heavy industries minister HD Kumaraswamy said in an email interview to Mint, following disbursal of ₹332 crore in FY25. Under the PM E-DRIVE scheme, which has ₹10,900 crore to be doled out by FY26, automakers receive a reimbursement from the government for every electric two- and three-wheeler, ambulance, truck, and bus they sell at a discount. Testing agencies are critical in implementing India's clean mobility schemes. Under both PM E-DRIVE and PLI-Auto, every manufacturer has to get its vehicles vetted by at least one of the four testing agencies for localisation criteria.
Time of India
7 days ago
- Automotive
- Time of India
Centre may seek details on missing auto PLI claims
The Centre is likely to call for information from around 50 beneficiaries of the Production-Linked Incentive scheme for the automobile and auto component industry ( PLI-Auto scheme ) who are yet to submit any incentive claims in the last two years despite having the requisite approvals, officials said. The step is a part of a larger review of the scheme, for ascertaining reasons behind its faltering, they said, adding just a third of the more than 80 intended beneficiaries have raised claims so far. "We are trying to figure out what changed since the scheme launched," a senior official told ET. Some intended beneficiaries have cited supply chain constraints as a reason for not meeting the scheme goals, according to people aware of the development. The PLI-Auto scheme was approved in September 2021 with a ₹25,938 crore budgetary outlay. Incentives were to be disbursed for meeting incremental production, investment, and domestic value addition (DVA) goals, among others from 2023-24 onwards. "There are very stringent DVA criteria under PLI-Auto...A techno-commercial audit is in-built to ensure localisation," one of the officials said, emphasising that several large original equipment manufacturers (OEMs), who have complied with the scheme's goals and received incentives, are reporting that a domestic component industry is developing due to this strict mandate. "Beneficiaries are supposed to ensure Tier two, three, and four suppliers comply with domestic manufacturing," the official said. Five OEMs have raised claims totalling more than ₹2,000 crore for achieving the scheme's goals in FY25. Officials said claims worth Rs 322 crore have been released so far for the scheme's goals achieved in FY24. A decision to figure out the root cause of PLI-Auto not living up to expectations was taken during a review of the scheme by the Ministry of Heavy Industries (MHI) last week. The scheme has attracted domestic investments worth ₹29,576 crore until March 2025. It was also decided that MHI will handhold applicants on operational aspects such as claims and DVA compliance.
Economic Times
7 days ago
- Automotive
- Economic Times
Centre may seek details on missing auto PLI claims
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The Centre is likely to call for information from around 50 beneficiaries of the Production-Linked Incentive scheme for the automobile and auto component industry (PLI-Auto scheme) who are yet to submit any incentive claims in the last two years despite having the requisite approvals, officials step is a part of a larger review of the scheme, for ascertaining reasons behind its faltering, they said, adding just a third of the more than 80 intended beneficiaries have raised claims so far."We are trying to figure out what changed since the scheme launched," a senior official told ET. Some intended beneficiaries have cited supply chain constraints as a reason for not meeting the scheme goals, according to people aware of the PLI-Auto scheme was approved in September 2021 with a ₹25,938 crore budgetary outlay. Incentives were to be disbursed for meeting incremental production, investment, and domestic value addition (DVA) goals, among others from 2023-24 onwards."There are very stringent DVA criteria under PLI-Auto...A techno-commercial audit is in-built to ensure localisation," one of the officials said, emphasising that several large original equipment manufacturers (OEMs), who have complied with the scheme's goals and received incentives, are reporting that a domestic component industry is developing due to this strict mandate."Beneficiaries are supposed to ensure Tier two, three, and four suppliers comply with domestic manufacturing," the official OEMs have raised claims totalling more than ₹2,000 crore for achieving the scheme's goals in FY25. Officials said claims worth Rs 322 crore have been released so far for the scheme's goals achieved in FY24.A decision to figure out the root cause of PLI-Auto not living up to expectations was taken during a review of the scheme by the Ministry of Heavy Industries (MHI) last week. The scheme has attracted domestic investments worth ₹29,576 crore until March 2025. It was also decided that MHI will handhold applicants on operational aspects such as claims and DVA compliance.
Time of India
16-07-2025
- Automotive
- Time of India
Centre may seek details on missing auto PLI claims
The Centre is set to investigate why many beneficiaries of the ₹25,938 crore PLI-Auto scheme haven't claimed incentives despite approvals. Launched in September 2021, the scheme aims to boost domestic auto manufacturing through incremental production and local value addition. Supply chain issues are cited as a hurdle. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Centre is likely to call for information from around 50 beneficiaries of the Production-Linked Incentive scheme for the automobile and auto component industry (PLI-Auto scheme) who are yet to submit any incentive claims in the last two years despite having the requisite approvals, officials step is a part of a larger review of the scheme, for ascertaining reasons behind its faltering, they said, adding just a third of the more than 80 intended beneficiaries have raised claims so far."We are trying to figure out what changed since the scheme launched," a senior official told ET. Some intended beneficiaries have cited supply chain constraints as a reason for not meeting the scheme goals, according to people aware of the PLI-Auto scheme was approved in September 2021 with a ₹25,938 crore budgetary outlay. Incentives were to be disbursed for meeting incremental production, investment, and domestic value addition (DVA) goals, among others from 2023-24 onwards."There are very stringent DVA criteria under PLI-Auto...A techno-commercial audit is in-built to ensure localisation," one of the officials said, emphasising that several large original equipment manufacturers (OEMs), who have complied with the scheme's goals and received incentives, are reporting that a domestic component industry is developing due to this strict mandate."Beneficiaries are supposed to ensure Tier two, three, and four suppliers comply with domestic manufacturing," the official OEMs have raised claims totalling more than ₹2,000 crore for achieving the scheme's goals in FY25. Officials said claims worth Rs 322 crore have been released so far for the scheme's goals achieved in FY24.A decision to figure out the root cause of PLI-Auto not living up to expectations was taken during a review of the scheme by the Ministry of Heavy Industries (MHI) last week. The scheme has attracted domestic investments worth ₹29,576 crore until March 2025. It was also decided that MHI will handhold applicants on operational aspects such as claims and DVA compliance.
