Ather’s CEO Tarun Mehta Counters Govt Stance on PLI, Says Startups Are ‘Engine’ of EV Shift

Why It Matters

Excluding high‑growth EV startups from PLI incentives risks a 13‑16% cost disadvantage and could slow India’s electric‑vehicle transition, while inclusive policies would accelerate innovation and domestic value addition.

Key Takeaways

• PLI thresholds exclude EV startups with under $1.2B revenue.
• Ather plans $240M greenfield plant, creating 4,000 jobs.
• Startups already meet domestic value‑addition targets similar to large firms.
• Excluding startups could widen cost gap by up to 16%.
• Mehta urges flexible eligibility based on R&D and localisation.

Pulse Analysis

The Indian government’s Production‑Linked Incentive (PLI) program was introduced to boost manufacturing scale and export competitiveness. By setting eligibility at roughly $1.2 billion in revenue and $360 million in fixed assets, the scheme favors established conglomerates, leaving most electric‑two‑wheeler startups—whose annual sales are far below those thresholds—out of the incentive pool. Critics argue that such high bars ignore the sector’s unique dynamics, where rapid innovation and localisation can outweigh sheer volume.

Startups like Ather Energy have been the de‑facto engine of India’s EV surge. Over the past decade, Ather has poured “thousands of crores” into research, software development, power‑electronics design and supply‑chain localisation, culminating in a $240 million greenfield factory slated for Maharashtra. The plant will generate about 4,000 direct jobs and significantly raise domestic component content, meeting the same value‑addition criteria the PLI rewards for larger players. These investments demonstrate that startups can achieve the policy’s intended outcomes—capacity creation, cost reduction, and export readiness—without the massive balance sheets of traditional manufacturers.

If the PLI continues to sideline innovators, the market could see a 13‑16% cost gap between incentivised incumbents and agile newcomers, dampening competition and slowing adoption rates. A more nuanced eligibility model—one that weighs R&D intensity, localisation percentages, and EV‑specific scale—could unlock additional private capital, spur faster technology diffusion, and cement India’s position as a global EV hub. Aligning policy with the realities of the electric‑two‑wheeler ecosystem would not only protect jobs but also accelerate the country’s broader climate and industrial goals.