“The Indian government has budgeted more than ₹259 billion (US$3.4 billion) in incentives to accelerate the production (and eventual adoption) of advanced automotive technology products under its recently announced Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry,” said Ammar Master, Senior Manager, Asia-Pacific Vehicle Forecasts at the LMC Automotive Consultancy today.
The scheme stresses battery electric vehicles (BEVs) and components and energy storage to advance the government’s aims of vehicle electrification in India, along with hydrogen fuel cell vehicles, which are intended to support India’s National Hydrogen Mission.
This is not an isolated occurrence. Electric vehicles, the so-called hydrogen economy and connected cars are the future of the planet and high paying employment. Virtually all major industrial nations are promoting policies and incentives to become major forces where no automaker dares to go alone. Except the dis-United States it seems. Even Senator Manchin’s next Maserati that he drives to his yacht will likely be an EV. Built where? The question facing Washington politicians of this ilk is simple: Do you care about the people in your district? Build Back Better1 is the answer. You are the problem.
The Alliance for Automotive Innovation, an industry trade group in the US says:
- A robust auto manufacturing sector is vital to a healthy U.S. economy. Autos drive America forward by supporting a total of 10.3 million American jobs, or about 8 percent of private-sector employment.
- The direct, indirect, and induced jobs supported by the auto industry leads to $650 billion in paychecks for millions of workers across the county.
- Each job for an auto manufacturer in the United States creates ~11 other positions in industries across the economy.
In India, eligible advanced technology components include those used in energy storage, power management, traction, braking, transmission, and HVAC, as well as rare earth magnets for motors. To promote the production of hydrogen fuel cell vehicles, the PLI scheme offers incentives for localizing 20 components, including fuel cells and fuel cell stacks, LMC said.
“Certainly, the scheme has been attracting OEMs. MG Motor seems to have advanced its plans for a mass market BEV, which we have assumed to be the MG 510, with a likely market introduction within the first quarter of 2023. The automaker is planning to heavily localize the vehicle, including the battery assembly, which should allow it to hit a target price of ₹1-1.5 million ($13,000-20,000).
“Hyundai’s recently announced plans to invest about ₹40 billion ($528 million) in to launching six BEVs in the Indian market by 2028 must also have been influenced by the PLI scheme, while sister company Kia is expected to unveil its own BEV roadmap for the Indian market next year.
“Meanwhile, we can certainly assume homegrown players Tata Motors and Mahindra & Mahindra – both of which have aggressive BEV plans – will apply for the PLI scheme, along with market leader Suzuki Group,” said Master.
As a result LMC says “we have improved our expectations of BEV sales in the Indian Passenger Vehicle market, with its share forecast at 15% by 2030, versus an estimated share of roughly 6% six months ago.”
1 Build Back Better
The consumer rebates and credits included in the Build Back Better framework will save the average American family hundreds of dollars per year in energy costs. These measures include enhancement and expansion of existing home energy and efficiency tax credits, as well as the creation of a new, electrification-focused rebate program. The framework will cut the cost of installing rooftop solar for a home by around 30%, shortening the payback period by around 5 years; and the framework’s electric vehicle tax credit will lower the cost of an electric vehicle that is made in America with American materials and union labor by $12,500 for a middle-class family. In addition, the framework will help rural communities tap into the clean energy opportunity through targeted grants and loans through the Department of Agriculture.
The Build Back Better legislation targets incentives to grow domestic supply chains in solar, wind, and other critical industries in communities on the front-lines of the energy transition. In addition, the framework will boost the competitiveness of existing industries, like steel, cement, and aluminum, through grants, loans, tax credits, and procurement to drive capital investment in the de-carbonization and revitalization of American manufacturing.
The framework will also fund port electrification; facilitate the deployment of cleaner transit, buses, and trucks; and support critical community capacity building, including grants to environmental justice communities.
Combined with savings from repealing the Trump Administration’s rebate rule, the plan is fully paid for by asking more from the very largest corporations and the wealthiest Americans. The 2017 tax cut delivered a windfall to them, and this would help reverse that—and invest in the country’s future. No one making under $400,000 will pay a penny more in taxes.
See AutoInformed on
- Chinese BYD, Toyota Agree to Develop Battery Electric Vehicles;
- Electric Vehicles – a Virus That Can’t Be Controlled?;
- EU Gets Tougher on Climate Change – Wants All EVs by 2035;
- Climate Change Car Wars – GM to Reach 100% Renewable Energy in 2025;
- UN on Global Warming: Rapid, Far-Reaching Unprecedented Changes in All Aspects of Society Needed
- Chinese CATL and Honda Alliance to Make EV Batteries, Technology and Maybe Autonomous Vehicles
- COP26 – CARB’s Liane Randolph New Chair of Transportation Decarbonisation Alliance
- Nissan to Sell Renewable Electricity to Japanese Employees
- Renault Group to Launch 10 Battery-Electric Vehicles by 2025
- US Battery Electric Vehicle Market – Progress or Proliferation? Tesla has a 75% Share. Is the Nissan Leaf a Best Buy?