Govt Reviews Key EV Schemes to Spur Local Manufacturing, Adoption

The government is reviewing several major initiatives aimed at accelerating electric vehicle (EV) adoption and strengthening domestic manufacturing, Minister of State for Heavy Industries Bhupathiraju Srinivasa Varma informed the Lok Sabha in a written reply on Tuesday. The Ministry of Heavy Industries is currently implementing five flagship schemes that collectively target advanced automotive technologies, battery production, public transport electrification and local value addition.

The Production Linked Incentive (PLI) Scheme for Automobiles and Auto Components, introduced in September 2021, is designed to boost India’s capacity to manufacture Advanced Automotive Technology components, including EVs. With a financial outlay of ₹25,938 crore, the scheme focuses on attracting investments and expanding the local supply chain.

To support the domestic battery ecosystem, the government launched the PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage in June 2021. Backed by ₹18,100 crore, it aims to establish competitive production capabilities for 50 GWh of ACC batteries, a critical component for EV growth.

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM e-DRIVE) scheme, notified in September 2024, has a budget of ₹10,900 crore. It provides incentives for electric two-wheelers, three-wheelers, buses, trucks and ambulances. The programme also supports the development of public charging networks and advanced testing infrastructure.

To expand electric public transport, the government introduced the PM e-Bus Sewa–Payment Security Mechanism (PSM) in October 2024. With an allocation of ₹3,435.33 crore, it aims to deploy more than 38,000 electric buses while ensuring timely payments to operators if public transport authorities default.

Additionally, the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India, notified in March 2024, seeks to attract manufacturers willing to invest at least ₹4,150 crore. It mandates 25% domestic value addition by the third year, rising to 50% by the fifth year, aiming to deepen localisation and strengthen India’s EV value chain.