UK Government plans to restrict its Rs 26,000 crore production-linked incentive (PLI) scheme for automobiles to green technologies such as electrics and futuristic hydrogen fuel cells, eschewing petrol and diesel vehicles. The original scope of allocation was Rs 57,000 crore over five years, starting 2022-23, which has now been reduced, government sources told TOI.
The scheme could be announced as early as next week and is likely to be a dampener for auto companies such as Maruti Suzuki, Honda, Toyota, Renault-Nissan, Skoda-VW and many others that derive all their sales from petrol/diesel cars.
Pursuing electric and other clean technologies for many years, homegrown companies Tata Motors and Mahindra & Mahindra will stand to gain.
Centre believes that restricting incentives for green vehicles would prompt automakers to urgently focus on getting electric and other sustainable technologies to the market instead of waiting for a mega customer transition.
The auto PLI scheme will also provide benefits to auto components that are aimed at making vehicles green, including those engaged in hybrid energy storage systems, collision warning gear, EV parts, automatic braking and blind spot detection parts, advanced driver assistance systems, and sensors of certain categories, sources told TOI.
The revised draft is focused on the new-age clean automobiles as part of the government’s aim to leapfrog into the next generation of green, connected and smart vehicles. Several of the existing players are currently seen as reluctant to switch over to EVs as they look to maximise value of their investments in operational plants.
Incentives for green technologies will fuel a significant growth in the share of hydrogen and battery-electric vehicles, the Centre argued.
With several international majors seen to be transitioning to electrics, the government is hoping to tap into what it believes will be a booming business in the coming years.
Source: The Economic Times.