M&M, Tata Motors bag big PLI incentives; earn brownie points for their work in advanced auto tech

The government has approved incentive payments totaling Rs246 crore to Mahindra & Mahindra (M&M) and Tata Motors under the Production Linked Incentive (PLI) scheme for the auto industry, news agency PTI reported on January 2. The scheme, worth per cent 25,938 crore, aims to boost domestic manufacturing of advanced automotive technologies.

Heavy Industries Minister H D Kumaraswamy praised both companies' progress, hailing Tata Motors and M&M for developing this capability. The minister exuded confidence that more applicants would take advantage of the PLI scheme.”

Tata Motors received Rs 142.13 crore based on sales of its Tiago EV, Starbus EV, and Ace EV, totaling Rs 1,380.24 crore in the 2023-24 fiscal year. M&M received Rs 104.08 crore for sales of its electric three-wheeler models (Treo, Treo Zor, and Zor Grand), totaling Rs 800.59 crore during the same period.

M&M’s claim included a cumulative investment of Rs 978.30 crore and certification of domestic value addition from the Automotive Research Association of India.

A government official confirmed the approvals, saying, "The total claims from these two applicants amount to approximately Rs 246 crore, which have been examined and recommended by the Project Management Agency (PMA) and subsequently approved by Ministry of Heavy Industries (MHI)."

The PLI scheme for the auto and auto components industry runs from 2023-24 to 2027-28, with payments scheduled between 2024-25 and 2028-29. It offers incentives ranging from 8per cent to 18per cent for components related to electric vehicles, hydrogen fuel cells, and other advanced technologies.

The scheme requires at least 50per cent domestic value addition and covers both domestic and export sales. As of September 2024, the scheme has driven Rs 20,715 crore in investments and Rs 10,472 crore in incremental sales. The first incentive payments are expected in 2024-25.