- Ather Energy CEO highlights that current PLI criteria exclude most EV startups, creating a structural imbalance.
- He suggests recalibrating eligibility metrics to better reflect innovation-driven EV companies instead of legacy financial thresholds.
Tarun Mehta, co-founder and CEO of Ather Energy Ltd., has raised concerns over the structural design of India’s Production Linked Incentive (PLI) scheme, arguing that it unintentionally sidelines startups contributing significantly to the electric vehicle transition. His remarks follow the government’s reiteration that the scheme is intended for “global champions,” setting high eligibility thresholds that many emerging EV players are unable to meet.
The current criteria require companies to demonstrate at least ₹10,000 crore in revenue and ₹3,000 crore in fixed assets. These benchmarks effectively exclude several EV-focused startups such as Ather Energy, River, and Euler Motors, despite their active role in advancing electric mobility through innovation, localisation, and new-age manufacturing approaches.
Startups Driving EV Transformation
Mehta emphasized that startups have already achieved many objectives that the PLI scheme aims to promote. Over the years, EV-first companies have invested heavily in product engineering, software integration, and manufacturing ecosystems without relying on legacy scale advantages. These efforts have helped build foundational capabilities for India’s EV ecosystem.
He described startups as a critical force behind the country’s electrification journey, suggesting that overlooking them in policy frameworks could weaken long-term industry growth. According to his perspective, innovation-led firms are not just participants but key enablers of technological progress and market development in the EV space.
Competitive Imbalance Due to Policy Design
The CEO pointed out that the current PLI structure creates a measurable cost disadvantage for startups. Companies that qualify for the incentives can benefit from an estimated 13–16% cost advantage, which can significantly influence pricing strategies and market competitiveness. This disparity, he warned, may shape the evolution of India’s EV market in ways that favor established players over emerging innovators.
Estimated Cost Advantage Under PLI Scheme
The following table outlines the competitive difference created by incentive eligibility:
| Category | Impact |
|---|---|
| PLI Eligible Companies | 13–16% Cost Advantage |
| Non-Eligible Startups | Higher Production Costs |
Need for Policy Recalibration
Rather than proposing a separate incentive structure for startups, Mehta advocated for refining the existing framework. He suggested that eligibility metrics should consider factors such as research and development intensity, localisation levels, and sector-specific scale, instead of relying solely on traditional financial thresholds. This approach, he believes, would create a more balanced and inclusive policy environment.
He also highlighted that restrictive norms could limit the ability of high-potential startups to scale manufacturing and expand exports. By adjusting the criteria, policymakers could better align incentives with the evolving dynamics of the EV industry, ensuring that both incumbents and innovators contribute effectively to India’s electrification goals.
Frequently Asked Questions
Why is Ather Energy criticizing the PLI scheme?
The CEO of Ather Energy has raised concerns that the current PLI scheme structure excludes most EV startups due to high financial eligibility criteria. He argues that these benchmarks favor large incumbents despite startups already contributing significantly to innovation, localisation, and EV ecosystem development. According to him, this creates an uneven playing field where startups face higher costs and reduced competitiveness, potentially slowing down overall industry progress and limiting the role of emerging companies in India’s electrification journey.
What changes are suggested for the PLI scheme?
The proposed changes focus on recalibrating eligibility criteria rather than creating a separate scheme for startups. Suggestions include incorporating metrics such as R&D investment, localisation levels, and EV-specific operational scale instead of relying only on revenue and asset thresholds. This would help align incentives with innovation-driven companies and ensure fair participation. Such adjustments could support domestic manufacturing growth, improve competitiveness, and enable startups to scale more effectively within India’s rapidly evolving electric vehicle market.
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