NEW DELHI: The Union ministry of heavy industries (MHI) is considering including electric vehicle (EV) startups in its flagship production-linked incentive (PLI) scheme for automobile and auto component industry following a nudge from the Prime Minister's Office (PMO), three people aware of the matter said.
The ministry of heavy industries, the nodal agency for the PLI scheme, has sought inputs from auto industry body Society of Indian Automobile Manufacturers (Siam) on including companies such as Ather Energy, River Mobility and Euler Motors in the ₹25,938-crore programme, which received the Union cabinet's approval in 2021. These companies either hadn't started operations when the scheme was being finalized or did not not meet the PLI-Auto's stringent revenue and net worth criteria.
As many as 82 companies are shortlisted under the PLI-Auto scheme, responsible for advancing India’s green mobility push and advanced automotive technologies. Siam is set to take up the issue for discussion on 23 January in a meeting of its electric mobility group (EMG).
“These companies had sought reopening a PLI window for new-age, deep-tech companies. Now, the ministry of heavy industries has sought views from the industry on this matter,” said the first of the three persons cited earlier, all of whom spoke on the condition of anonymity.
“Siam will discuss the matter soon,” said the second person, adding that any decision taken by the auto industry’s lobby group has to be unanimous. Mint has reviewed a copy of the agenda for Siam’s 23 January meeting.
Ather, River, and Euler have been lobbying the government to be included in the incentive scheme that has disbursed ₹2,321.94 crore cumulatively in FY25 and FY26, and will be operational till FY29.
The development comes in the backdrop of two million EVs sold in the country in 2025, up from about 1.9 million in 2024, according to the government’s Vahan registry portal. India’s EV market is poised for a significant value surge, with new models being launched and zero-emission vehicles becoming more affordable for consumers gradually, as manufacturers look to achieve economies of scale. Market intelligence firm Mordor Intelligence pegged India’s EV market to grow to about $110 billion by 2029, from about $55 billion in 2025.
Ather, which was founded in 2013, launched its first vehicle in 2018, and became a publicly listed company in 2025. River Mobility was set up in 2021, and began sales in 2023. Euler Motors was founded in 2018, and launched its first vehicle in 2021. Ather sold about 126,000 EVs in 2024, and a little over 200,000 in 2025, according to Vahan. Euler, which makes electric three-wheelers and small trucks, sold about 3,500 units in 2024 and roughly 5,000 units in 2025. River Mobility, which makes electric two-wheelers, sold about 2,500 units in 2024, and a little over 15,000 units in 2025.
The companies had earlier written to heavy industries minister H.D. Kumaraswamy seeking reopening of the PLI window, noting that they were not eligible for incentives when the scheme was launched, but had since become eligible, Mint had reported earlier on 25 December.
To be sure, amending the eligibility rules requires approvals from the Union cabinet.
A spokesperson for River Mobility declined comment. Queries emailed to the spokespersons of PMO, MHI, heavy industries minister Kumaraswamy’s office, Siam, Ather and Euler on 8 January remained unanswered. Existing PLI beneficiaries Tata Motors, Mahindra & Mahindra, Ola Electric, Bajaj Auto, TVS Motor, Hero MotoCorp, and Volvo Eicher Commercial Vehicles did not respond to queries emailed on 8 January.
Experts say that in the event of new companies getting inducted, the incumbents may see some recalibration in their playbook.
“If new players join the scheme, existing participants will face a selective impact. Large OEMs (original equipment manufacturers) are unlikely to see their volumes affected, but they will need to reassess their capital efficiency, localization roadmaps, and technology timelines. In contrast, new-age EV companies with a narrow and focused product range may set a new benchmark for execution speed and product-led innovation," said Poonam Upadhyay, director, Crisil Ratings. "This could prompt incumbents to prioritize milestone achievement, intensify localization efforts, and exercise greater discipline in incentive-linked capital allocation. By doing so, incumbents can still stay competitive.”
Some incumbents seem to be enthused by the development.
EKA Mobility, which has three e-bus models approved for incentives under the scheme, said expanding eligibility to more new-age companies, while simultaneously building domestic manufacturing capabilities, could act as a catalyst for India’s electric mobility ecosystem.
“As beneficiaries of the PLI-Auto scheme ourselves, we see this as a positive step towards building a strong and resilient EV ecosystem in India. Our products qualify under the Auto PLI framework and the scheme has played an important role in enabling us to Design in India, Make in India, and Export from India. More broadly, PLI has played an important role in strengthening local manufacturing and encouraging innovation," said a spokesperson for EKA Mobility, a subsidiary of Pinnacle Mobility Solutions Pvt. Ltd. "Any move that supports wider participation like opening it up to more new-age companies, while staying true to the scheme’s intent and localization goals, can only help accelerate the growth of India’s electric mobility ecosystem and make it stronger in the long run.”
EKA Mobility recently won orders for about 3,400 buses under India’s largest 10,900-EV bus tender launched under the PM E-Drive scheme, which aims to electrify India's public road transport.
The PLI-Auto scheme aims to build a robust domestic manufacturing ecosystem for advanced automotive technologies, which include zero-emission vehicles and their components. In early 2022, the government shortlisted 82 companies under the scheme, which could become eligible for benefits provided they meet strict local value addition criteria. Only 18 out of these 82 companies have met this condition till date. Of these, eight are vehicle makers and 10 are component makers.
Stiff entry criteria have kept many companies away from the scheme’s benefits. According to the scheme’s guidelines, automakers seeking incentives need to have over ₹10,000 crore in revenue, and non-automaker companies that now wish to make EVs need at least ₹1,000 crore in global net worth. Another criterion is to have 50% domestic value addition in their vehicles, following which automakers will be eligible for benefits under this scheme.
The PLI-Auto scheme assumes importance as it aims to build a robust EV manufacturing ecosystem in the country with its large corpus, in an effort to shield the country’s automakers and their suppliers from geopolitical uncertainties and the supply shocks that could follow.
The sector is gradually recovering from China’s halt on exports of rare earth magnets in April 2025, even as the government was forced to relax localization norms under another EV incentive scheme specifically for large commercial EVs.
The government in September 2025 amended the localization criteria under the ₹10,900-crore PM E-Drive scheme to allow e-truck and e-bus manufacturers to claim incentives while using imported sub-assemblies of traction motors fitted with rare earth magnets.