Automakers Concerned Over Investment Timelines Amid PLI Scheme Extension

ENA Sectors 2024-02-12 17:07:45 New Delhi, Feb 12 (KNN) Automotive companies participating in the government's Rs 25,938 crore Production-Linked Incentive (PLI) scheme are seeking clarity regarding the extension of the investment timeline, according to industry insiders. With the recent one-year extension of the PLI scheme, firms are urging the government to align the investment timeline accordingly, reported Mint. The five-year PLI scheme, formally known as the PLI for Advanced Automotive Technologies (PLI-AAT), was extended by a year in late December. This extension, spanning from FY24 to FY28, aims to bolster the sector by disbursing incentives at the end of each financial year. However, the original scheme required participating companies to make annual investments between FY23 and FY27, with minimum investment thresholds specified based on company classification. Failure to meet these investment requirements results in disqualification from receiving benefits for the respective year. Despite the scheme extension announcement in December, no adjustments to the investment timeline were communicated, leaving companies that missed the initial investment deadline in FY23 uncertain about their eligibility for incentives in the current fiscal year. Sudhir Mehta, Chairman, Pinnacle Mobility Solutions (EKA), a participant in the PLI-AAT scheme, emphasised the need for synchronising the investment fulfilment criteria with the extended scheme duration. He highlighted the challenge of developing new electric vehicle components and acquiring specialised manufacturing equipment, underscoring the necessity for an extended investment timeline. Saurabh Agarwal, Partner and auto tax leader at EY, acknowledged the relief provided by the scheme's extension but emphasised the need for a corresponding extension of the investment period. Many companies have faced difficulties meeting investment commitments due to technological challenges, Agarwal noted. While around 85 companies qualify for the PLI-AAT scheme, only three have certified vehicles thus far: Tata Motors, Mahindra and Mahindra, and Ola Electric. Certification processes for several other companies are ongoing, with incentives expected to be disbursed starting from the next fiscal year. The PLI-AAT scheme aims to drive the manufacturing of new technology products, particularly electric vehicles, in India. By incentivising advancements across the value chain, including component manufacturers and vehicle producers, the scheme aims to foster growth and innovation within the automotive sector. (KNN Bureau) 36673 https://knnindia.co.in/news/newsdetails/sectors/automakers-concerned-over-investment-timelines-amid-pli-scheme-extension 2024-02-12 17:07:45 knnindia.co.in Automakers Concerned Over Investment Timelines Amid PLI Scheme Extension