Fold Scheme for Automobile to Attract Global EV Players and Auto Component Manufacturers: Analysts
According to Citi, the change in the PLI regime increases the government’s focus on vehicle electrification. Although this is quite disappointing for companies planning to increase the capacity of internal combustion engine vehicles.
The Union Cabinet on Wednesday approved a revised Production Incentive Program (PLI) of rupee 25,938 crore for the auto and auto components industries to improve domestic manufacturing capabilities. Last year, the government announced a program for the sector with an expenditure of Rs 57,043 crore, allocated for five years.
Informing the media of the decision, Union Minister Anurag Thakur said the program for the auto industry will result in a new investment of over Rs 42,500 crore, additional production of over Rs 2.3 lakh crore and will create additional employment opportunities of over 7.5 lakh. . The government has also approved a Rs 120 crore PLI program for the drone industry.
According to Citi, the change in the PLI regime increases the government’s focus on vehicle electrification. Although this is quite disappointing for companies planning to increase the capacity of internal combustion engine vehicles. This could lead existing OEMs to invest more in electric vehicles. In addition, Citi expects global manufacturers of electric vehicles or OEM parts to eventually invest in India.
Antique Broking says that a faster transition from ICE vehicles to electric vehicles is negative for traditional OEMs. They may not be able to catch up, but in terms of listed players, Tata Motors has the most credible plans to increase their sales of electric vehicles among automakers, as they hold a market share anyway. leader in the field of electric passenger vehicles. .
Now in the pace of Bosch auto components, Wabco, Sona Comstar, are the biggest beneficiaries.
(Edited by : Ankit gohel)