Key Takeaways ✨
India is charging full speed into the electric vehicle (EV) era, and if there’s one government initiative that’s transforming the industry from the inside out, it’s the Production Linked Incentive (PLI) Scheme. Designed to promote large-scale domestic manufacturing, this policy isn’t just about subsidies. It’s about building a self-reliant, export-ready EV ecosystem that can compete with the world.
In this detailed guide, we’ll unpack everything you need to know about the PLI Scheme for the EV sector, including how to apply, eligibility criteria, incentive calculations, current beneficiaries, and the opportunities it opens up for startups, OEMs, and component makers in India.
Let’s break it down step-by-step so that you can confidently understand—and benefit from—this ambitious policy framework.
What is the PLI Scheme?
The Production Linked Incentive (PLI) Scheme is a performance-based government initiative that rewards businesses for increasing their manufacturing output within India. Rather than giving upfront subsidies, it offers cash incentives tied to actual sales and production volume over a set period (usually 5 years).
Think of it this way: if you manufacture more and meet localization targets, you get a percentage of your sales back as a government incentive.
In the EV space, the government has introduced two major PLI schemes:
- PLI for Automobile and Auto Components – Focused on electric vehicles and related components
- PLI for Advanced Chemistry Cell (ACC) Battery Storage – Focused on domestic battery cell manufacturing
Both these schemes work in synergy with FAME-II, NEMMP, and various state EV policies to push India towards a cleaner, self-sufficient transport future.
Why the EV Sector Was Chosen for PLI
India imports a large chunk of its vehicle components and almost all of its battery cells. This dependence on foreign countries—especially for advanced lithium-ion technology—has been a strategic concern.
Here’s why the EV sector is central to PLI:
- Reduce import dependency on China, Korea, and Japan
- Encourage Make in India for critical components like motors, controllers, and battery packs
- Lower costs of EVs by localizing the supply chain
- Create jobs in EV design, manufacturing, and R&D
- Establish India as a global EV export hub
- Boost investment from both Indian conglomerates and global automotive giants
Overview of the Two PLI Schemes for the EV Sector
Let’s understand both schemes and what they offer:
1. PLI Scheme for Automobile and Auto Components
Launched by: Ministry of Heavy Industries
Outlay: ₹25,938 crore
Tenure: 5 years
Focus Areas:
- Electric and Hydrogen Fuel Cell Vehicles
- Advanced automotive components
- Software, sensors, BMS, drive trains
Who can apply:
- OEMs making EVs (2W, 3W, 4W, Buses)
- Component manufacturers making e-mobility parts
- Startups with innovation in automotive electronics or vehicle systems
2. PLI Scheme for Advanced Chemistry Cell (ACC) Battery
Launched by: Ministry of Heavy Industries + NITI Aayog
Outlay: ₹18,100 crore
Tenure: 5 years
Focus Areas:
- Lithium-ion cell manufacturing (LFP, NMC)
- Future battery technologies (Sodium-ion, Solid-state)
- Localization of battery supply chain
Who can apply:
- Battery manufacturers
- Companies investing in Giga-factories
- Joint ventures between Indian and global players
Key Features of the PLI Scheme for Auto & Components
This scheme is split into two categories:
A. Champion OEM Incentive Scheme
Targeted at automotive companies that produce EVs and fuel cell vehicles.
- Minimum Investment: ₹2,000 crore
- Minimum Revenue Requirement: ₹10,000 crore (global group revenue)
- Applicable to 4W, 2W, buses, and new-age EV makers
B. Component Champion Incentive Scheme
For auto component makers producing:
- EV drive systems
- Advanced braking systems
- Battery packs
- Motor controllers
- Software for EVs
- Minimum Investment: ₹250 crore
- Global group turnover requirement: ₹500 crore
Key Features of PLI Scheme for ACC Battery Storage
- Focused on domestic battery cell production
- Minimum capacity requirement: 5 GWh per bidder
- Minimum investment: ₹225 crore per GWh
- Incentives up to ₹2,000 per kWh based on localization targets
- Maximum incentive tenure: 5 years
Eligibility Criteria – Who Can Apply?
Let’s simplify this:
| Category | Eligible Entities | Investment Threshold |
|---|---|---|
| OEM (Auto) | EV manufacturers (e.g., Tata Motors, Ola Electric) | ₹2,000 Cr |
| Component Makers | Suppliers of motors, ECUs, sensors, packs | ₹250 Cr |
| Battery Manufacturers | Cell producers (LFP, NMC, Solid-State) | ₹225 Cr per GWh |
| Startups & MSMEs | EV-focused firms with deep tech IP | Flexible based on proposal |
To qualify, your business must:
- Be registered in India
- Meet turnover or investment requirements
- Commit to manufacturing in India
- Reach localization & revenue milestones
Step-by-Step: How to Apply for PLI in EV Sector
Step 1: Monitor Government Announcements
PLI applications open periodically. Keep an eye on:
Step 2: Prepare a Detailed Proposal
Include:
- Business plan (5 years)
- Investment layout and plant setup
- Expected sales and production targets
- Employment generation data
- Innovation or IP (for startups)
Step 3: Register on the Portal
- Go to https://pliauto.in
- Register with PAN, GST, CIN
- Upload documents and submit proposal under RFP or EOI round
Step 4: Evaluation by Project Management Agency (PMA)
Your application will be reviewed for:
- Feasibility
- Tech readiness
- Financial capacity
- Employment and localization goals
Step 5: Approval and Signing of Agreement
If selected, you’ll get:
- Letter of Approval
- Milestone calendar
- Terms for incentive disbursement
How Are Incentives Disbursed?
- Payout is linked to actual production and sales
- You must meet yearly value-addition and investment targets
- Incentives are paid via direct bank transfer (DBT)
- Audits and reports need to be filed annually
- Maximum payout is capped based on your bid and product type
Success Stories: Companies Approved Under PLI
Some of the beneficiaries include:
| Company | Segment | PLI Scheme |
|---|---|---|
| Ola Electric | 2-Wheeler EVs | Champion OEM |
| Tata Motors | EV Cars, Buses | Champion OEM |
| Mahindra Electric | Commercial EVs | Champion OEM |
| Reliance New Energy | Battery Cells | ACC PLI |
| Rajesh Exports | Giga-factory (Batteries) | ACC PLI |
| Lucas TVS | EV Components | Component Scheme |
These companies are now building manufacturing lines in Gujarat, Tamil Nadu, Maharashtra, and Telangana under the PLI roadmap.
Integration with Other Policies
PLI is not a standalone initiative. It works alongside:
- FAME II – for demand-side incentives
- NEMMP – long-term EV vision
- State EV policies – land, power, tax incentives
- Startup India – tax holidays and seed funding
- Make in India – for duty waivers on equipment
Together, these create a full-stack policy ecosystem.
What’s Coming Next: PLI 2.0 and Expansion Plans
The government is considering:
- Including battery swapping technologies
- Adding EV software platforms and telematics
- Creating a special PLI for MSMEs in EV supply chain
- Encouraging joint ventures with global tech leaders
- Offering PLI-linked export bonuses
Business Opportunities Opened by PLI
If you’re a startup or manufacturer, here’s where you can benefit:
1. EV Component Manufacturing
Start plants to make:
- BLDC motors
- Controllers
- Battery packs
- CAN bus systems
2. Giga-factory Investment
Enter the battery cell production space—India currently has low capacity but high demand.
3. EV Assembly Lines
Launch white-label or contract manufacturing units.
4. Charging Equipment Manufacturing
Produce home chargers, fast DC units, and grid-integration devices.
5. R&D and IP Development
Earn incentives for developing software, vehicle management systems, and in-vehicle telematics.
Challenges to Be Aware Of
- High entry thresholds (small players find it tough)
- Long gestation period before incentives are paid
- Localization requirements need deep supply chains
- Compliances and audits can be paperwork-heavy
- Investment must begin early to qualify
Expert Tips for Applicants
- Partner with state governments to get land and infra benefits
- Invest early in testing and certification
- Join EV industry bodies for early updates and support
- Focus on value addition, not just assembly
- Track PLI notification timelines closely
Final Thoughts
The PLI Scheme is more than just an incentive—it’s a strategy. A strategy to make India the next big EV manufacturing hub. It’s already showing results, with major companies setting up EV and battery plants across the country.
But this is just the beginning.
Whether you’re a startup with battery tech or an auto giant looking to electrify your fleet, PLI is your gateway to scale, incentives, and long-term market positioning.
So if you’ve been waiting for the right time to invest in India’s EV growth story, this is it.
