In a significant development for India's electric vehicle (EV) sector, the Union Ministry of Heavy Industries (MHI) is actively considering the inclusion of prominent EV startups in its flagship Production-Linked Incentive (PLI) scheme for automobiles and auto components. This reconsideration comes following a nudge from the Prime Minister's Office (PMO), according to sources familiar with the matter.
Government Seeks Industry Input on Expanding PLI Access
The nodal ministry has sought formal inputs from the Society of Indian Automobile Manufacturers (SIAM) regarding the potential inclusion of companies such as Ather Energy, River Mobility, and Euler Motors into the ₹25,938-crore PLI-Auto programme. This scheme, approved by the Union Cabinet in 2021, currently has 82 shortlisted companies aimed at advancing India's green mobility and advanced automotive technology goals.
These EV startups were initially excluded because they either had not commenced operations when the scheme was finalized or failed to meet its stringent eligibility criteria concerning revenue and net worth. The ministry's move follows direct appeals from these companies to Heavy Industries Minister H.D. Kumaraswamy, arguing that while they were ineligible at the scheme's launch, they have since grown to meet the necessary benchmarks.
SIAM's Electric Mobility Group (EMG) is scheduled to discuss this critical issue in a meeting on 23 January 2026. Any decision from the industry body would require a unanimous consensus among its members.
Potential Impact on India's Booming EV Market
This development unfolds against the backdrop of robust growth in India's EV market. Government data from the Vahan registry shows two million EVs were sold in the country in 2025, up from approximately 1.9 million in 2024. The market is projected to surge in value from around $55 billion in 2025 to about $110 billion by 2029, according to Mordor Intelligence.
The inclusion of these agile startups could recalibrate the competitive dynamics within the PLI scheme. Industry experts suggest that while large incumbent Original Equipment Manufacturers (OEMs) may not see a direct impact on volumes, they might need to reassess their strategies for capital efficiency, localization, and technology development.
"New-age EV companies with a focused product range may set a new benchmark for execution speed and product-led innovation," said Poonam Upadhyay, Director at Crisil Ratings. This could push all participants to prioritize milestone achievement and intensify localization efforts to stay competitive for the incentives.
Scheme Details and Startup Profiles
The PLI-Auto scheme is designed to build a robust domestic manufacturing ecosystem for advanced automotive technologies, including zero-emission vehicles and their components. Its criteria are notably strict: automakers need over ₹10,000 crore in revenue, and new EV makers require a minimum ₹1,000 crore in global net worth, along with demonstrating 50% domestic value addition in their vehicles.
To date, only 18 out of the 82 shortlisted companies (8 vehicle makers and 10 component makers) have met the local value addition condition and are receiving benefits. The scheme has disbursed ₹2,321.94 crore cumulatively in FY25 and FY26 and will remain operational until FY29.
The startups lobbying for inclusion have shown substantial growth:
- Ather Energy (founded 2013): Sold over 200,000 EVs in 2025 after going public that year.
- Euler Motors (founded 2018): Sold roughly 5,000 electric three-wheelers and small trucks in 2025.
- River Mobility (founded 2021): Sold a little over 15,000 electric two-wheelers in 2025.
Some existing PLI beneficiaries view the potential expansion positively. A spokesperson for EKA Mobility, a subsidiary of Pinnacle Mobility Solutions, stated that widening participation to new-age companies, while adhering to localization goals, could accelerate the growth of India's EV ecosystem. EKA recently won a major order for about 3,400 e-buses under the PM E-Drive scheme.
It is important to note that any formal amendment to the PLI-Auto scheme's eligibility rules would require fresh approvals from the Union Cabinet. The move highlights the government's adaptive approach to fostering a competitive and inclusive EV manufacturing landscape in India.
