[sri_tesla]

The central government today cleared a new production-linked incentive (PLI) scheme for the auto sector with an outlay of Rs 26,000 crores. The scheme is categorized into two: Champion OEM Incentive Scheme which is applicable for Battery Electric Vehicles and Hydrogen Fuel Cell Vehicles of all segments; and Component Champion Incentive Scheme which is for the Advanced Automotive Technology components of vehicles, Completely Knocked Down (CKD)/ Semi Knocked Down (SKD) kits, Vehicle aggregates of 2-Wheelers, 3-Wheelers, passenger vehicles, commercial vehicles, and tractors, etc.





Eligibility criteria:



Incentives:



Source:
https://auto.economictimes.indiatime...uture/86233273

[Madrasin_selvan]

Great Initiative. But is this coming too late at a time in our market ?

This initiative is aimed at localization and investment efforts, but will it translate into cost savings for the end user needs to be seen.

[V.Narayan]

A very useful first step. I do not know enough about the costs, gross margins and R&D costs of the auto industry to opine on the effectiveness and needed size of such incentives but directionally it is the right thing to do. I think this is a first step to test the waters before the incentives are expanded in size and reach. As a country we cannot afford Norway style concessions to the car buyer and this incentive at the production end will be more efficient use of the same budget plus it will encourage manufacturers to head in the right direction.

Just like the shift from personal computers and laptops to mobile based computing & communication devices spawned a new generation of manufacturers and brands so will it happen, I believe, in the auto industry. Some OEM names we are familiar with today will disappear as more nimble manufacturers (eg OLA) emerge. Remember PCs from Commodore & cellphones from Motorola!

We are witnessing a generation change in modes of road transport the likes of which was last witnessed by the generation that spawned the 1890s to 1920s. Petrol pumps, road side car mechanics, vroom vroom of the engine will all disappear and get replaced by other facets.

[SulemanP]

End user benefits will not come before 2023, OEMs / Component manufacturer's will avail the benefits and may or may not pass them on to the actual end user...or they may pass on just a part of it to customers...

[shortbread]

Originally Posted by Madrasin_selvan

This initiative is aimed at localization and investment efforts, but will it translate into cost savings for the end user needs to be seen.

Originally Posted by SulemanP

End user benefits will not come before 2023, OEMs / Component manufacturer's will avail the benefits and may or may not pass them on to the actual end user...or they may pass on just a part of it to customers...

The customer only benefits when competition increases and more manufacturers fight amongst themselves to win buyers.

The initiative is the first step, encourage more car makers to enter the Indian EV space.

Cmon Maruti, you guys can single handedly create an EV revolution in India!

[Rohan1511]

Disappointed with Hybrid as a vehicle segment not being mentioned there. As a transition period from gas powered vehicles to renewable energy vehicles, it should have given more gap here. Toyota as well as Honda have hybrid technologies already. I don't understand why government isn't pushing for hybrid cars?

I guess the only thing which comes to my mind is the service cost of maintaining hybrid cars would increase, no?

What are the hybrid energy storage system mentioned above? Is it with regards to EV vehicles only?

[lsjey]

While this is a good initiative, I'm not sure if EV should be promoted heavily in India just yet.

Please read through this: https://www.wired.co.uk/article/germ...ehicles-europe

While India has not yet set a date for ending sale of ICE vehicles, it surely is following in that path.

According to Judith Kirton-Darling, deputy general secretary of IndustriAll Europe, a European trade union federation, the EU’s proposal to ban the sale of internal combustion engines by 2035 has to be accompanied by a policy framework that rises to the enormous task ahead. The shift, she says, is too big for companies to navigate alone. “This is the biggest industrial revolution in more than a century. It is a colossal economic change, which is coming,” Kirton-Darling says. She likens the impending crisis to the decline of northern England’s heavy industry and Detroit’s car industry. And if the situation is not managed properly then the continent might soon face its very own Brexit or Trump-esque shocks. “When there’s a lot of structural change, you create a lot of uncertainty for people. And there are political consequences of that because there are those who are waiting to exploit social anxiety.”

When developed countries are facing such severe issues, is it wise for India to pursue the same strategies as them without the financial wherewithal?

Cars are Germany’s most important export, with sales totalling around €300 billion annually. Almost five per cent of all domestic jobs are directly linked to the automotive industry. “We have just under a million employees in the car industry in Germany. We assume that around 200,000 of them are acutely endangered, most of them from automotive suppliers,” says Wolfgang Lemb, chairman of IG Metall, Germany’s largest trade union. A recent report by the Boston Consulting Group predicted that a staggering 42 per cent of jobs will be lost in “internal combustion engine-focussed suppliers” across Europe between now and 2030 – that, according the firm’s calculations, will result in 280,000 people out of work.

Also, India doesn't have the capabilities to re-skill a large workforce.

Last year, the board of one of the world’s largest automotive suppliers, ZF Friedrichshafen, which specialises in drive technologies, shocked its workers by announcing that up to 15,000 jobs would have to be cut. Half of the company’s business was reliant on combustion engines, and the swift transition to electric compounded by the slump in sales during the pandemic boded ill for car-part makers. To survive the crisis, ZF created its own retraining facility for 30,000 employees and acquired several smaller companies, broadening its portfolio to include autonomous driving and wind energy. A spokesperson says that owing to those measures, ZF managed to cut its reliance on combustion engines down to 27 per cent. Although 6,000 workers have left the company since the 2020 announcement – many of them accepting early retirement offers – and more cuts might follow, the spokesperson says that ZF is now in a better position than it was just a few years ago.

[shortbread]

Originally Posted by Rohan1511

Disappointed with Hybrid as a vehicle segment not being mentioned there. As a transition period from gas powered vehicles to renewable energy vehicles, it should have given more gap here. Toyota as well as Honda have hybrid technologies already. I don't understand why government isn't pushing for hybrid cars?

I guess the only thing which comes to my mind is the service cost of maintaining hybrid cars would increase, no?

What are the hybrid energy storage system mentioned above? Is it with regards to EV vehicles only?

Hybrids was the transition needed when EVs were struggling with 100 mile range. Manufacturers liked it, enabled them to continue using IC powertrains and charge more for hybrid add ons.

A buyer ends up paying for an IC engine/gearbox, batteries, electric motor, controls, complexities etc.

EV range today has reached a stage where it covers 95% of people's needs, therefore avoids having to be supplemented by an IC engine.

If EV costs need to be brought down, then batteries need to be cheaper and the way to do this is domestic production and volumes.

Infrastructure is growing at a rapid pace and in another two years time there will be no lack of charging stations, especially when private sector invests into the EV charging business model.

Plus some Indian manufacturers are notorious of finding loopholes in the legislation in order to reap the benefits by simply adapting existing products eg. Micro hybrids by Maruti, M&M etc...

[SKC-auto]

Originally Posted by lsjey

While this is a good initiative, I'm not sure if EV should be promoted heavily in India just yet.

This is the right time to promote our own battery, EV components and other industry. If we let go this opportunity (and time) we will be left with no industry, just importing from other countries because no one is going to wait for India to catch up.

With new industry, there are new opportunities, while also seeing many job losses in old industry. There are plenty of solar installation jobs created as the coal industry is dying. If you go back 15years, there where lakhs of families living on a Phone Booth, Xerox & Internet services, if we stopped at that point we had to kill Broadband, 2G & 4G internet.

I do not think any union member will support such a change affecting job losses of their members, the union leaders reaction is natural but may not be entirely true.

[AZT]

An FTA with the EU along with this will definitely help. Anyone putting in money will be mainly export focused.

[volkman10]

Ford drops India plans for EV exports.

Ford has withdrawn its application from the Centre’s production-linked incentive (PLI) scheme for export of electric vehicles.


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