The Centre for Digital Economy Policy Research (C-DEP) released a study examining the impact of the Auto Production Linked Incentive (PLI) scheme on India’s electric two-wheeler industry. The findings were presented during a roundtable discussion in New Delhi. The Auto PLI scheme was introduced in 2021 to support domestic manufacturing, improve localisation and promote advanced automotive technologies.
Growth Trends After PLI Rollout
According to the study, non-PLI electric two-wheeler manufacturers recorded a growth rate of 407 percent in FY2022. This declined to –33 percent in FY2024 and further to –11 percent in FY2025 after the scheme’s rollout.
The report states that PLI-approved manufacturers benefit from a cost advantage estimated at 13–16 percent. This has enabled them to price products more competitively and expand production capacity.
Electric two-wheelers currently account for nearly 6 percent of India’s total two-wheeler sales, compared to a negligible share in FY2019. The sector’s growth has also been supported by schemes such as FAME India Scheme and PM E-DRIVE.
Export Performance
The study highlights differences in export performance between PLI and non-PLI manufacturers. It notes that 77 percent of India’s electric two-wheeler exports are driven by non-PLI models. PLI-approved models account for less than one-fourth of total exports.
The report states that while PLI manufacturers benefit from cost advantages, this has largely been used to expand domestic market share rather than develop export-focused platforms.
It also notes potential risks to India’s traditional two-wheeler export markets such as Nepal, parts of Latin America and Africa, as global demand shifts toward electric vehicles. Chinese manufacturers including Yadea and Sunra are identified as active competitors in these markets.
Innovation and Segment Gaps
The study states that innovation activity, including work in electric motorcycles and low-speed delivery scooters, remains concentrated among non-PLI manufacturers.
Motorcycles account for nearly 65 percent of India’s overall two-wheeler market. However, electric penetration in this segment remains around 0.1 percent. The report notes that several PLI-approved manufacturers have not entered these segments.
Innovation-led companies outside the PLI framework face higher capital requirements and limited access to production-linked incentives during scale-up.
Inactive Approved Applicants and Fund Use
Out of nine approved electric two-wheeler OEMs under the Auto PLI scheme, the study states that only four are actively producing and selling vehicles.
Companies such as Hop Electric, Axis Clean Mobility, Booma Innovative Transport Solutions and Elest Private Limited have not produced Auto PLI-approved models. In FY2024–25, Hop Electric recorded 289 sales and Booma recorded 935 sales, while Axis Clean Mobility and Elest recorded zero sales.
The total outlay for the Auto PLI scheme is ₹25,938 crore. By December 2025, ₹2,321.94 crore had been disbursed against a cumulative target of ₹3,754 crore. This represents around 9 percent of the total outlay, compared to an expected 14.47 percent by that stage. The study notes that inactive beneficiaries continue to hold approvals, limiting access for other manufacturers.
Policy Recommendations
The report outlines several recommendations:
- Open a targeted window for innovation-led manufacturers that meet localisation requirements under the Phased Manufacturing Programme (PMP).
- Introduce a first-come, first-served mechanism to prevent inactive players from retaining approvals.
- Provide additional incentives of 3–5 percent for segments such as electric motorcycles.
- Conduct periodic performance reviews to remove non-performing beneficiaries and reallocate funds.
