CII Urges PMO Action on EV Sector Issues, Highlights PLI Scheme Gaps

The auto PLI system has several serious problems, and the Confederation of Indian Industry (CII) has called for simpler regulations to help new electric vehicle companies get off the ground and stimulate innovation. In a letter sent to the PMO and the MHI, a group of six electric vehicle startups affiliated with the CII Unicorn Forum laid out their plans.

Startups are requesting a new application window and more lenient eligibility standards so that they can participate in the automotive industry's production-linked incentive (PLI) programme. The CEOs of four different firms (Raptee, Ather Energy, River Mobility, and Euler Motors) sent a letter on April 17. The present structure and selection of companies under the auto PLI scheme are causing a cost disadvantage that is directly impacting the market, according to HV, Ultraviolette Automotive, and Matter Motor.

Issues Raised by EV Startups in PLI

Current operating costs for new-age enterprises promoting core indigenous innovation are 13% to 16% lower than for PLI grantees, according to the forum. This, it went on to say, stops them from passing savings on to customers who are price-conscious. According to the CII, there are a few qualified companies that have got their perks but aren't doing anything to boost sales or output. The forum also made note of a report that was released earlier this year by a parliamentary standing committee. The report highlighted that new domestic manufacturers and electric vehicle startups are finding it difficult to participate due to the high investment and revenue requirements. Out of a total expenditure of INR 25,938 crore, just INR 2,378 crore had been distributed as of January 2026, according to the report.

It also suggested a measured easing of eligibility requirements and the establishment of distinct standards for highly promising domestic players. Among the individuals who have signed the letter are Tarun Mehta, CEO and co-founder of Ather Energy; Aravind Mani, CEO and co-founder of River Mobility; Saurav Kumar, CEO and founder of Euler Motors; and Dinesh Arjun, CEO and co-founder of Raptee.HV; Ultraviolette Automotive's founder and CEO, Narayan Subramaniam; and Matter's creator and CEO, Mohal Lalbhai.

CII Urging Govt For New Application Window

The forum has asked the government to launch a fresh application period inside the current PLI programme in order to resolve these concerns. In order to incorporate modern EV companies, this new window needs to be either time-bound or implemented through a rolling mechanism.

The "differentiated eligibility tier" that CII has suggested would change the focus of qualification criteria. It will transform from technical competence to research and development intensity, IP generation, domestic value addition, and technological capabilities.