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Govt set to roll out auto incentives in next FY, posing challenges for electric vehicle leaders
Industry News- Dec 20,23
Despite initial skepticism from automakers about meeting the incentive claim process within the current year, the scheme, first notified in 2021, is expected to bring certainty to its 67 autoparts-making applicants.
According to a written response to Parliament by Union Minister for Heavy Industries Mahendra Nath Pandey on Tuesday, the government is set to initiate the disbursement of incentives under the Rs 26,000 crore production-linked incentive schemes for automobiles and auto components in the upcoming fiscal year. Despite initial skepticism from automakers about meeting the incentive claim process within the current year, the scheme, first notified in 2021, is expected to bring certainty to its 67 autoparts-making applicants.
However, the delay in incentive distribution may pose challenges for domestic automakers Tata Motors and Mahindra & Mahindra. Both companies, having secured domestic value addition (DVA) certifications for electric vehicles in the commercial and passenger vehicle segments, could face setbacks. The electric passenger vehicle market has experienced a sales plateau in recent months, leading major original equipment manufacturers (OEMs) to offer discounts. The government remains optimistic, projecting the sale of one lakh electric passenger vehicles by March 31, 2024.
Among the 67 automotive component makers and 18 OEMs selected as beneficiaries, only Tata Motors and M&M have obtained localisation certifications from the government-run testing agency ARAI (Automotive Research Association of India) for various products featuring electric powertrains. The incentives will be granted based on verified sales and audits of investments in advanced automotive technologies. However, numerous companies have faced challenges in submitting the required documentation, signed off by statutory auditors, in a timely manner due to complexities in the application process.
Hanif Qureshi, Joint Secretary in the Ministry of Heavy Industries, expressed optimism about more companies receiving DVA certifications soon.
Source: Mint
Mahendra Nath Pandey
Tata Motors
Mahindra & Mahindra
Automotive Research Association of India
Hanif Qureshi
Ministry of Heavy Industries
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