Electric Two-Wheeler Startups Seek Inclusive PLI Norms as Entry Barriers Remain High

Leading electric two-wheeler startups in India have urged the government to revise the existing Production Linked Incentive (PLI) framework to make it more accessible for emerging manufacturers, arguing that current eligibility thresholds favour only large, established automotive groups. The request was raised following industry-level discussions held on January 22, highlighting growing concern among EV startups over limited access to policy-backed incentives.

Companies such as Ather Energy and other new-age electric mobility firms believe the present PLI structure does not adequately reflect the realities of India’s evolving EV ecosystem. While the scheme was designed to strengthen domestic manufacturing and reduce import dependence, startups say the high financial benchmarks have unintentionally excluded technology-driven players that are still scaling operations.

Under the existing PLI norms for the automobile sector, applicants are required to meet a minimum global group turnover of ₹10,000 crore along with a committed investment of ₹3,000 crore in fixed assets. These parameters were framed with large OEMs in mind and, according to industry data, have resulted in only a small fraction of applicants qualifying for incentives despite strong interest from EV-focused startups.

Electric two-wheeler startups argue that innovation, localisation depth, and technology development should carry greater weight than balance sheet size alone. Many of these companies have invested heavily in battery management systems, software integration, and local supply chains but remain ineligible due to scale-related criteria. Industry executives maintain that this gap risks slowing innovation in a segment that has been central to India’s EV adoption story.

The proposal submitted to the government suggests the creation of a separate PLI window or a revised framework tailored specifically for EV startups and smaller manufacturers. Such a structure could feature lower turnover thresholds, phased investment requirements, or incentive calculations linked to localisation milestones rather than absolute revenue size. According to stakeholders, this would align incentives more closely with policy goals of fostering indigenous technology and competitive manufacturing.

Industry bodies have begun internal consultations to assess the feasibility of the proposal and build broader consensus. Discussions are expected to focus on ensuring that any revised structure maintains accountability and performance benchmarks while allowing newer companies to participate meaningfully. Policymakers are understood to be reviewing the representation, though no formal commitment to amend the scheme has been announced so far.

Electric two-wheelers remain the fastest-growing segment in India’s EV market, driven by urban demand, improving charging infrastructure, and favourable total cost of ownership. Startups have played a key role in expanding consumer acceptance and introducing advanced features, making their inclusion in incentive programmes a critical factor for sustaining long-term growth.

For now, the PLI framework remains unchanged. However, industry participants believe that timely policy adjustments could help unlock the next phase of electric mobility expansion, particularly as India targets higher EV penetration and deeper manufacturing localisation over the coming decade.