EV Two-Wheeler Makers Seek Localisation Relief from Government

Electric 2-wheeler (e2W) manufacturers have approached the Ministry of Heavy Industries (MHI) to request temporary exemptions from key localisation requirements. 

They seek relief from the Production-Linked Incentive (PLI) scheme's condition of achieving 50% domestic value addition and the Phased Manufacturing Programme (PMP), which requires local motor assembly to qualify for a ₹5,000 per vehicle subsidy under the PM e-VIDYA scheme.

Rationale Behind the Appeal

Due to a shortage of rare earth magnets, firms are forced to import complete electric motors from China rather than assembling them locally, making it impossible to meet the PLI’s localisation norms. Industry leaders argue that this shift increases production costs and causes delays of 2–3 months because of required vehicle customisation and local testing. 

They assert that the current situation is unavoidable and request a time-bound exemption until the supply chain stabilises.

Government Response and Industry Standpoint

While the government acknowledges the issue, it insists that any exemptions be temporary and carefully regulated. Some companies have suggested extending the relief until the subsidy scheme expires in March 2026. The ministry has asked for a detailed list of critical electric motors that are indispensable for vehicle function. 

Meanwhile, 2-wheeler firms also point out that several 4-wheeler manufacturers already import such motors, and argue for equal treatment under the PLI scheme.

Read More: China Approves Limited Rare Earth Export, India Not a Priority in Supply Chain!

Conclusion 

E2W manufacturers are urging the government for short-term policy relief to manage rare earth shortages, sustain production, and retain key subsidies.

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