Automotive Sector Incentive Plan Limited to Green Vehicles, Energy News, ET EnergyWorld

Gasoline and diesel vehicles will not be included in the ambitious Production Incentive Program (PLI) for automobiles, as the government will limit the benefits of the program to Rs 26,000 crore – reduced from Rs 57,000 crore initially planned – to green technologies such as electricity and those powered by futuristic hydrogen fuel cells.

The program, which could be announced as early as next week, should be a drag for leading companies such as Maruti Suzuki, Honda (cars and two-wheelers), Toyota, Renault-Nissan, Skoda-VW and many other manufacturers. automobiles that derive all their sales from gasoline or diesel cars.

Homegrown Tata Motors and Mahindra & Mahindra, which have been pursuing electric and other clean technologies for many years, will stand to gain everything. Although the original plan called for an allocation of Rs 57,000 crore over five years, starting from 2022-2023, the scope of the program has now been refined, government sources told TOI. companies to urgently focus on bringing electrical and other sustainable technologies to market, rather than waiting for a mega customer transition.

In addition to vehicles, the PLI for Automobiles program will also provide benefits to automotive components aimed at making vehicles green or smarter. Categories that will be rewarded with incentives in the components industry will include those engaged in hybrid energy storage systems, collision warning devices, EV parts, automatic braking and blind spot detection parts. , advanced driver assistance systems and sensors in certain categories, sources told TOI. .

The original plan was seen as far too broad, while the revised draft now focuses on so-called new age clean automobiles as part of the government’s goal of moving to the next generation of green, connected and smart vehicles. .

The government’s shift in strategy could push major auto players like Maruti Suzuki and Hyundai (it only has one imported electric Kona) to provide an aggressive push for electric and other green tech to make the cut.

Several of the existing players are currently seen as reluctant to switch to electric vehicles as they seek to maximize the value of their investments in operational factories (production of gasoline and diesel cars), prompting the government to push those who wish to make a rapid transition. , according to sources mentioned.

The Center argued that incentives for both green technologies will fuel significant growth in the share of hydrogen and battery-electric vehicles. As several international majors are in the process of switching to electricity, the government hopes to operate what it believes is a booming business in the years to come. Government officials said several companies as well as industry bodies, including Siam and Acma, were consulted before formalizing the plan.

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