Govt links PLI incentives to testing, localization for electric quadricycles

NEW DELHI: In a first, the government has notified dedicated testing and performance norms for electric quadricycles under the ₹25,938-crore production-linked incentive (PLI) scheme for automobiles and auto components, tightening eligibility by linking testing standards with local value-addition requirements.

In a notification dated 13 January, the ministry of heavy industries (MHI) upgraded testing norms for electric vehicles (EVs) under the PLI-Auto scheme, linking them with local value-addition requirements under the PM E-Drive scheme, which has replaced the earlier Faster Adoption and Manufacturing of Electric Vehicles (FAME-II) programme.

The government has also defined performance criteria for e-quadricycles—minimum range 80km, and maximum energy consumption to be under 12 kilowatt-hours per 100km.

Range refers to the distance an EV can cover on a full charge. Lower energy consumption indicates more energy-efficient vehicles.

The government's testing agencies such as Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology (ICAT) will use these parameters to decide whether models are eligible for incentives.

“Performance criteria for battery and vehicle is critical to ensure quality of products that are rolled out in the market. This is particularly important given the past experience of sub-par vehicles being launched,” said Sharif Qamar, associate director of transport and urban governance at The Energy and Resources Institute (TERI).

Quadricycles are small four-wheelers used to carry passengers and goods, and are identified under the L7M and L7N categories of vehicles, which are mostly made in India and exported. L7M is a classification for quadricycles used for passenger transport, and L7N is for goods transport.

More than 4,900 units, which is nearly 98% of the 5,090 quadricycles made in India in calendar year 2025 were exported, data from the Society of Indian Automobile Manufacturers (Siam) showed.

“The performance criteria under the PLI also gives an opportunity to the OEMs (original equipment manufacturers) and component manufacturers to compete in the international market. Quadricycles, which are mainly export-oriented products, would give an edge to Indian manufacturers especially in the African, South Asian and Latin American markets,” said Qamar of Teri.

Sales of battery-operated electric quadricycles are eligible for incentives under the PLI-Auto scheme, according to publicly-available eligibility norms for the scheme, as these ‘microcars’ are classified as advanced automotive technology.

No electric quadricycles have been sold in India in the last two years, Vahan data showed, but most units sold in this vehicle segment run on CNG.

Pune-based Bajaj Auto Ltd has sold the most quadricycles in India in the last two years—340, according to Vahan—followed by Hyundai Motor India Ltd, Mahindra & Mahindra Ltd, and Mercedes Benz AG, which sold one each in the same period, and Maruti Suzuki India Ltd which sold two.

Queries emailed to the ministry of heavy industries, Bajaj Auto, Maruti, Hyundai, and Mercedes Benz on 15 January remained unanswered.

Bajaj Auto executive director Rakesh Sharma had said in a Q4FY24 earnings call that the company is developing on an electric version of its ‘Qute’ model of quadricycles. “Yes, we are investing behind the Qute platform. When the BS-IV, BS-VI transitions took place, there was such a lot of work which was there in our R&D that we deprioritize Qute only because of the volumes, etcetera. But we are now looking at an upgrade, which will provide the customer with a tech condition in Qute. And we already now got a CNG-based Qute, and we will be working on an electric Qute as well,” said Sharma in April 2024.

Mint reported earlier in August 2024 that even after four years of the ₹25,938-crore PLI-Auto scheme, no manufacturer has applied for testing e-quadricycles at the country’s top testing agency, ARAI.

To be sure, the PLI-Auto scheme mandates 50% localization, meaning all vehicles must source half their components from India.

In an August 2024 report, government think tank Niti Aayog had said manufacturers had made specific demands related to last-mile mobility. They had called for a ‘single-till’ approach between two critical electric mobility government schemes, PLI-Auto and PM E-drive, so that vehicles qualified for incentives under one would also qualify for incentives under the other.