PLI AUTO SCHEME: GOVT ANNOUNCES AMENDMENTS - 5 KEY THINGS TO KNOW

Govt notifies partial changes to PLI Auto scheme: The Ministry of Heavy Industries has notified partial modifications to the production linked incentive (PLI) scheme for the automobile and auto component industry, tightening electric vehicle (EV) eligibility norms and aligning incentives with PM E-DRIVE, effective January 13, 2026.

The government has notified that for the new EV eligibility, only battery electric vehicles meeting revised performance norms will qualify for the incentives.

The scheme will now be aligned with PM E-DRIVE for battery electric 2W, 3W and e-buses and trucks.

Battery electric quadricycles (L7M and L7N) must have a minimum 80 km range and top speed of 40 km per hour.

Mandatory electric generative braking system for all eligible EVs.

Vehicles to be tested on chassis dynamometer at GVW with battery SoC between 40-60%.

Electricity consumption to be measured as per AIS 039 standards.

The Union Cabinet approved the PLI Auto scheme on September 15, 2021, with a budgetary outlay of Rs 25,938 crore for a period of 5 years (FY22-23 to FY26-27). The scheme aims to boost manufacturing of advanced automotive technology (AAT) products. It will also help to facilitate and promote deep localisation for AAT products and enable creation of domestic as well as global supply chain. The scheme is focused on zero emission vehicles (ZEVs) – battery electric vehicles and hydrogen fuel cell vehicles.

As of November 30, 2025, under the scheme, there are 82 approved applicants. The approved applicants have multiple units manufacturing various AAT products.

As on November 30, 2025, the incentive of Rs 1,350.83 crore has been disbursed to five applicants. The eligible sales target till March, 2028 (over base year FY19-20) is Rs 2,31,500 crore and sales of Rs 32,879 crore has been achieved till September 30, 2025. Key beneficiaries under the scheme include Tata Motors, Bajaj Auto, Mahindra & Mahindra, TVS Motor, Ola Electric, and component manufacturer Toyota Kirloskar Auto Parts, among others.

India has been witnessing an increase in EV adoption in recent years. Besides, localisation of EV value chain is expanding across the AAT products due to domestic value addition (DVA). The PLI Auto scheme incentivises only those products which achieve a domestic value addition of minimum 50%.

The Prime Minister Electric Drive (PM E-DRIVE) scheme was implemented by the Ministry of Heavy Industries with a budget of Rs 10,900 crore for the period from October 2024 to March 2026. It aims to boost adoption of electric vehicles by providing financial incentives for the purchase of electric two-wheelers, three-wheelers, e-buses and e-trucks, thereby reducing pollution and improving air quality.

Stay informed with ET Now’s in-depth coverage of Business News, Stock Market updates, IPO announcements, Company News, and Personal Finance Updates. Track live Share Market data, Mutual Funds, and the latest news events in real time.

2026-01-14T06:13:31Z