Only 6 out of 46 EV models make cut for PLI scheme

NEW DELHI: The China factor continues to weigh heavily on India's emerging electric car market as the domestic supply chain for green cars is inadequate in key areas such as batteries, semiconductors and magnets.

Consider this: of the 46 EV models sold in the country, only six - around 13% - have been found eligible for benefits under the production-linked incentive (PLI) scheme of govt as they meet the domestic value-add (DVA) mandates.

The rest were marked ineligible for PLI as they carried imported content more than the stipulated levels with the vast part of components coming in from China, sources told TOI.

The incentives are given out by the ministry of heavy industries (MHI), and the criteria for allotting PLI is that a model needs to have at least 50% local content in its composition (a relaxation on import of battery cells takes the DVA cut-off lower to 40%).

"The six approved models include five cars from Tata Motors and one from Mahindra. All the other models sold in the market, including from companies such as JSW MG, BMW, Mercedes-Benz, Hyundai, Kia, Citroen, VinFast, Volvo, Tesla and Audi, have over 60% imported content," one of the sources said.

The EV models that have made the cut are - Tata Nexon, Tata Punch and Tata Harrier SUVs, Tata Tiago hatch, and Tata Tigor sedan, apart from Mahindra XEV9E.

Tata's Curvv EV and Mahindra BE6 green also did not meet PLI's local value-add criteria, despite other models from the companies making the cut.

Officials from companies whose models did not make the cut said that meeting the DVA criteria at such a nascent stage of EV adoption remains challenging.

"The local supply ecosystem for EVs is still not as evolved as it is in the internal-combustion engine (ICE) category. Also, with limited sales of the greens, it is quite challenging and practically unviable to ask our supply chain partners to come to India," said a top functionary at a leading European automaker.

So what are the parts that are being imported for the EVs? "These include lithium-ion battery cells; rare earth magnets; DC Motors; laminated stators; semiconductor chips; printed circuit boards, and electronic child parts, all of which are coming from China. Then you have connectors; contactors; relays, and DC-DC converters which come from China and Taiwan," said an industry executive, citing a detailed study that was carried out by PwC on localisation of EV component supply chain in India.


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