India’s EV hub dream hits a policy speed bump

Questions are increasingly being raised over how India’s ambition of becoming a global electric vehicle (EV) hub will be realised. Industry voices argue that innovators must be actively supported if India is to emerge as a true manufacturing centre for EVs. Without this, the vision risks remaining largely aspirational.

Amid the rapid expansion of India’s electric vehicle market, deep-tech startups have flagged serious concerns over the Production Linked Incentive (PLI) scheme for the automobile sector. Several EV companies say that a large portion of the PLI scheme announced by the Ministry of Heavy Industries has yet to translate into actual support on the ground.

Despite allocations running into thousands of crores of rupees, disbursement under the scheme has been extremely limited. This has deprived innovation-driven startups of the backing they were expecting, even as competition in the global EV space intensifies.

Industry stakeholders maintain that if the allocated funds are deployed effectively and in a more balanced manner, India’s EV ecosystem could rapidly strengthen its position in global markets.

Early 2026 estimates indicate that utilisation of PLI funds for EV startups remains low. Only around 10 per cent of the allocated amount has reportedly been disbursed so far. In the Advanced Chemistry Cell (ACC) battery segment, incentives distributed account for just 2.8 per cent of the targeted allocation. Despite a higher budgetary outlay, overall utilisation of PLI funds is expected to reach only about 12 per cent by the end of the 2025–26 financial year.

EV startups argue that simply increasing allocations will not accelerate industry growth. Unless a meaningful share of the funds reaches startups, Indian firms will struggle to remain competitive. At present, they say, only a handful of established players appear to be benefiting from the scheme.

Saurav Kumar, Founder and CEO of Euler Motors, points out that commercial EVs offer the highest returns but receive inadequate incentives under the current PLI framework. To boost job creation in this segment, he says, the scheme needs restructuring. Instead of turnover-based criteria, incentives should be linked to actual EV sales.

Echoing similar concerns, Arvind Mani, Co-founder and CEO of River Mobility, says the primary goal of India’s EV push should be building sustainable domestic capacity. Innovators, he argues, must be supported if India is to become a global EV hub and a genuine manufacturing centre.

As questions mount over slow disbursals and structural gaps in the PLI scheme, policymakers will be under pressure to respond.