Car manufacturers can benefit from a variety of performance-related incentives (PLI) schemes to reduce selling prices, Minister of Heavy Industry Mahendra Nat Pandi said ET’s

Tvesh Mishra in an interview. Edited excerpts:

How does the government react to the incidents with the fire of electric cars?

The Ministry of Road Transport is investigating the incidents. Independent consequences is underway. I am sure that measures will be taken once the faults are identified.

The center put its weight behind PLI schemes. What experience have you had so far?

The PLI scheme for the automotive industry and automotive components is designed to expand the production capacity of advanced automotive products (AAP), with a budget cost of Rs 25,938 crore. It attracted a proposed investment of 72,850 crore rupees with a target of 42,500 crore. The proposed investment is Rs 43,016 crore from applicants under the Champion OEM Promotion Scheme and RUR 29,834 crore from applicants under the Component Champion Promotion Scheme. The scheme provides for an increase in advanced automotive technology (AAT) output of more than Rs 2.3 crore.

The overwhelming reaction shows that the industry has put aside faith in India’s progress as a world-class manufacturing site.

How can PLI help increase our share of advanced global supply chains?

The PLI-Auto scheme will help the automotive industry switch to products with higher added value. It also provides incentives of up to 18% to encourage the industry to make new investments in local AAT product supply chains under the PLI scheme for the automotive sector. The scheme encourages only those products that meet the requirements of the AAT, for which a minimum of 50% of intrinsic value added (DVA) is achieved. DVA is expected to increase to more than 50% over the life of the scheme.

Other PLI schemes, for example, for advanced chemical cells (

), special steel, large-scale production of electronics, IT apparatus and semiconductors, will also help in achieving higher DVA for automotive and automotive components.

What could be the reason for the more-than-expected investment commitment in the PLI scheme for cars and automotive components?

There is enthusiasm for AAT products. The emphasis on zero-emission technologies – battery-powered electric vehicles and hydrogen-fueled vehicles – is also an encouragement. This PLI scheme has an attractive incentive package for the automotive sector. You can also take advantage of the incentives under the PLI scheme for advanced chemical cells (ACC) (Rs 18,100 crore) and the faster introduction of electric vehicle production (FAME) (Rs 10,000 crore). The benefits of these schemes can be used to reduce the selling price of vehicles and make them more competitive.

When will we see that the first batch of cars and auto parts will be produced under this scheme? How will this affect the cost of production?

Financial year 2022-23 is the first production year for which an approved applicant can apply for certain sales incentives. Sales of AAT products with a DVA of at least 50% from April 1, 2022 will be eligible for the promotion provided that the investment threshold and additional certain sales are reached.

What changes can be made to better implement FAME?

Under FAME-II, installing charging stations is a challenge. We are negotiating with the Ministry of Petroleum to install 22,000 charging stations in the retail facilities of oil marketing companies.

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