EV startups seek govt intervention: CII writes to PMO, flags PLI flaws

Confederation of Indian Industry flags structural flaws in auto PLI scheme, seeks easier norms to support EV startups and boost innovation

A taskforce of six electric vehicle startups under the CII Unicorn Forum has written to the Prime Minister’s Office (PMO) and the Ministry of Heavy Industries (MHI), seeking a fresh application window and easier eligibility norms to allow startups to qualify under the production-linked incentive (PLI) scheme for the automobile sector. 

In a letter dated April 17, the top bosses of startups — Ather Energy, River Mobility, Euler Motors, Ra­ptee.HV, Ultraviolette Automotive and Matter Motor — said the current structure and selection of companies under the auto PLI scheme is creating a cost disadvantage that is directly affecting the market.  

“New-age companies driving core indigenous innovation currently operate at a 13 per cent to 16 per cent cost disadvantage compa­red to PLI beneficiaries,” the forum said, adding that this prevents them from passing on benefits to price-sensitive consumers. Business Standard has reviewed the letter. 

The forum said some approved companies are “inactive players” that have secured benefits but are not contributing to production or sales. The forum also referred to a parliamentary standing committee re­port released earlier this year, wh­ich said the high revenue and investment thresholds are limiting the participation of emerging domestic manufacturers and EV startups. 

The report had flagged underutilisation of funds, noting that only ₹2,378 crore had been disbursed till January 2026 out of the ₹25,938 crore outlay, and recommended calibrated relaxation of eligibility norms along with separate criteria for high-potential domestic players. 

Signatories to the letter include Tarun Mehta, cofounder and CEO of Ather Energy; Aravind Mani, cofou­nder and CEO of River Mobility; Saurav Kumar, founder and CEO of Euler Motors; Dinesh Arjun, cofou­nder and CEO of Raptee.HV; Nar­a­yan Subramaniam, cofounder and CEO of Ultraviolette Automotive; and Mohal Lalbhai, founder and CEO of Matter. 

To address these issues, the for­um has urged the government to “op­en a new application window” under the existing PLI scheme, eith­er as a time-bound exercise or thr­o­ugh a rolling mechanism, to include new-age EV firms. They have also proposed a “differentiated eligibility tier” that shifts qualification metrics towards technology capability, R&D intensity, intellectual property creation and domestic value addition. 

The PMO, MHI, CII and the aforementioned six companies did not respond to queries sent by Business Standard on this matter.