In a recent interview, Saurav Kumar, CEO of Euler Motors, stated that the government's auto Production Linked Incentive (PLI) scheme provides large established firms with a significant 13-15% cost advantage over startups. This disparity, he argued, creates an uneven playing field in the automotive sector.
PLI Scheme and Startup Challenges
Kumar explained that while the PLI scheme is designed to boost domestic manufacturing, its structure inherently favors bigger players who can leverage economies of scale and existing infrastructure. Startups, on the other hand, lack the capital and production volume to fully benefit from the incentives, putting them at a competitive disadvantage.
“The auto PLI scheme gives large firms a 13-15% advantage over startups in terms of cost,” Kumar said. “This is a significant gap that makes it harder for new entrants to compete on price.”
EV Space: A Gateway for Startups
Despite this challenge, Kumar highlighted that the electric vehicle sector has opened up new opportunities for a generation of startups. These companies are disrupting traditional industry structures through innovation, advanced technology, and novel mobility models.
“The EV space has leveled the playing field in many ways,” he added. “Startups can compete by focusing on innovation, software, and customer-centric approaches, rather than just manufacturing scale.”
Kumar emphasized that startups are agile and can adapt quickly to changing market demands, which is crucial in the rapidly evolving EV landscape. They are also more willing to experiment with new business models, such as battery-as-a-service and direct-to-consumer sales.
Industry Implications
The comments come amid a broader debate about how government policies can support both incumbents and new players. Kumar suggested that policymakers should consider tweaking the PLI scheme to ensure that startups also benefit, for instance by including incentives for research and development or for smaller production volumes.
“We need a policy framework that encourages innovation and entrepreneurship, not just scale,” he said. “Startups are the future of the EV industry, and they need support to thrive.”
Euler Motors, a Delhi-based EV startup, manufactures electric three-wheelers for cargo and passenger use. The company has been at the forefront of promoting electric mobility in India and has raised significant funding from investors.
Kumar’s remarks underscore the ongoing challenges and opportunities in India’s transition to electric vehicles, where established automakers and startups are vying for market share in a rapidly growing sector.
