Tata Motors, M&M, Ola Electric to get double benefit of auto PLI, FAME

Tata Motors, Mahindra, and Ola Electric were already availing of subsidy under FAME

Tata Motors, Mahindra & Mahindra, and Ola Electric are set to receive another round of incentives as they take the lead in getting benefits under the government’s production-linked incentive (PLI) programme.

These three firms were receiving subsidies under the ongoing Faster Adoption & Manufacturing of Electric Vehicles in India (FAME India) scheme, valid till this month.

According to officials, all eligible companies benefit from both the auto PLI incentives and FAME-II incentives. “Eligible entities will receive incentives from the auto PLI, and if these entities are already receiving benefits from FAME, they will continue to receive incentives until March 2024,” an official said.

In addition to auto PLI, the Ministry of Heavy Industries is overseeing the FAME-II scheme, which provides a demand incentive for electric vehicles (EVs) in India by subsidising sales. This means that specific models from these three companies qualify for incentives to produce and sell the same vehicle.

Hanif Qureshi, additional secretary, Ministry of Heavy Industries, said Tata Motors and Mahindra, both manufacturers of four-wheelers, obtained certificates under the auto PLI earlier in 2024, while Ola Electric, a two-wheeler maker, received approval in the first half of February.

Qureshi told the media disbursements under auto PLI were tied to sales volumes and any single company could claim up to 25 per cent of the total scheme allocation of Rs 25,938 crore. The implementation of the scheme relies on domestic value addition (DVA) certification from testing agencies, which assess the localisation levels in these vehicles.

“PLI incentives can be availed upon the sale of eligible vehicles following DVA certification,” he said.

Tata Motors, Mahindra, and Ola Electric have obtained DVA certificates for 22 variants of advanced automotive technology (AAT) products. Mahindra & Mahindra is the pioneer in meeting the DVA criteria in the three-wheeler category, while Tata Motors holds the distinction of being the first to fulfil the DVA criteria in both the four-wheeler and bus categories.

The auto PLI scheme provides support for producing EVs by granting benefits to original equipment manufacturers upon sales. 

Its objective is to encourage and foster extensive localisation for AAT products such as zero emission vehicles, battery electric vehicles, and hydrogen fuel cell vehicles. The incentives under the auto PLI scheme are effective for five years, starting 2022-23, with disbursements applicable in the subsequent financial year.

Ola S1 Pro gets DVA certificate under PLI

Ola Electric received domestic value addition (DVA) certification for its S1 Pro model under the production-linked incentive (PLI) scheme for the automobile and auto component industry. “Receiving the PLI certification for the second product affirms our vertically integrated manufacturing strength marking a significant achievement in advancing India's EV vision,” the spoksperson said.