The government has greenlit 50 out of 74 applications from automakers for its productivity-linked incentive (PLI) scheme designed to boost electric vehicle (EV) manufacturing. The remaining 24 applications are still under review.
These approvals, granted on Wednesday, are expected to help companies mitigate the financial losses they are experiencing due to the currently low volumes of EV manufacturing.
Under the PLI scheme, automakers can receive a government grant ranging from 13-15 percent of the annual sales value of their EVs.
This scheme is intended to boost the total revenue of the company and help offset the increased costs associated with new technology investments, thereby narrowing the margin gap between internal combustion engine (ICE) vehicles and EVs.
Additionally, companies that achieve sales exceeding Rs. 10,000 crores within five years of the PLI period will qualify for an extra 2 percent government support.
The ‘sales value linked’ scheme applies to battery EVs and hydrogen fuel cell vehicles across various segments, including two-wheelers, three-wheelers, passenger vehicles, commercial vehicles, and other advanced automotive technologies.
Introduced in September 2021 with a budget of Rs. 25,938 crores, the PLI scheme emphasises deep localisation and a domestic value addition of 50 percent.
It aims to encourage automakers to invest in clean and advanced technologies, reduce reliance on imports, and scale up manufacturing over its five-year duration, starting from 2023-24.
Here are a few companies that experienced fluctuations in their share prices following the recent approval of applications under the PLI scheme:
Bajaj Auto Limited
With a market cap of Rs. 2.9 lakh crores, the shares of the world’s largest manufacturer of three-wheelers surged by 5.2 percent on BSE to hit a new 52-week high at Rs. 10,429 on Friday.
Bajaj Auto stands out among the companies as the only automaker by securing approvals for all 13 of its applications filed for its electric scooter Chetak and three-wheelers, according to sources.
These approvals indicate that Bajaj Auto has met the domestic value addition requirements of the PLI scheme, making the company eligible for incentives.
In its investor conference call, Bajaj Auto reported that it benefited from the PLI scheme, accruing 13 percent of the sales value as per the PLI feasibility in its June quarter earnings.
Tata Motors Limited
With a market cap of Rs. 3.6 lakh crores, the shares of a two and three-wheeler manufacturer globally surged by 2.2 percent on BSE to Rs. 1,092.3 on Friday.
Tata Motors has successfully received approval for 15 of its 27 applications under the Production-Linked Incentive (PLI) scheme for electric vehicles (EVs), with 12 applications still in process.
TVS Motors Limited
With a market cap of Rs. 1.31 lakh crores, the shares of a leading global automaker that operates in the two and three-wheeler segment surged by 4.2 percent on BSE to hit a new 52-week high at Rs. 2,818 on Friday.
TVS Motors has had two of its five applications approved under the scheme, which include the TVS iQube Electric and the SmartXonnect version of the TVS iQube Electric. The remaining three applications are still under review.
Mahindra & Mahindra Limited
With a market cap of Rs. 3.43 lakh crores, the shares of India’s leading SUV manufacturer surged by 1.3 percent on BSE to Rs. 2,768.95 on Friday.
Mahindra & Mahindra has received approval for 16 of its 23 applications under the PLI scheme, with the remaining 7 still under review.
Ola Electric Mobility Limited
With a market cap of Rs. 55,669 crores, the shares of a leading EV manufacturer in India surged by 0.9 percent on BSE to Rs. 132.48 on Friday.
Ola Electric, which has secured approval for four of its electric scooter models under the PLI scheme, is expected to receive an incentive ranging from 13-18 percent of the determined sales value.
The 3 kWh (kilowatt hour) and 4 kWh versions of the Ola S1X have received the certification for compliance with the eligibility assessment requirements as per the PLI Scheme for the automobile and auto components after meeting the minimum localisation criteria of 50 percent as mandated by the Ministry of Heavy Industries.
This certification makes Ola Electric the only two-wheeler and pure-play EV manufacturer to receive the certification for compliance for four products—S1 Air, S1 Pro, and S1 X (3 kWh, and 4 kWh).
The company previously received certification for the S1 Air at the Auto PLI Conclave held in January 2024.
Written by Shivani Singh
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