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Startups disappointed over exclusion from Auto PLI Scheme; Ather founder Tarun Mehta raises objection
Startups and new-age electric vehicle (EV) companies have expressed disappointment over their exclusion from the government's Auto Production Linked Incentive (PLI) scheme. Highlighting their concerns, Ather Energy Co-founder and CEO Tarun Mehta has strongly objected to the current framework, stating that it fails to reflect the realities of India’s evolving EV ecosystem.
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According to Ather Energy Co-founder and CEO Tarun Mehta, startups and emerging EV companies have played a significant role in shaping the sector over the past decade. Image: AI-Generated and x.com/tarunsmehta
Written By: ZeeBiz WebTeam
Updated: Thu, Apr 30, 2026
05:20 PM IST
05:20 PM IST
ZeeBiz WebDesk
Startups and new-age electric vehicle (EV) companies have expressed disappointment over their exclusion from the government's Auto Production Linked Incentive (PLI) scheme. Highlighting their concerns, Ather Energy Co-founder and CEO Tarun Mehta has strongly objected to the current framework, stating that it fails to reflect the realities of India’s evolving EV ecosystem.
According to Mehta, startups and emerging EV companies have played a significant role in shaping the sector over the past decade. These companies have invested heavily in research and development (R&D), software, battery technology, and localisation—often without the advantage of legacy scale.
In a statement shared on social media platform X (formerly Twitter), Mehta said:
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"I have had the opportunity to engage with several policy makers on the topic of Auto PLI excluding startups and I just can’t believe that they would think so! It cannot be emphasised enough - current framing of Auto PLI needs to stay closely aligned with the moment India is in."
I have had the opportunity to engage with several policy makers on the topic of Auto PLI excluding startups and I just can’t believe that they would think so!
It cannot be emphasised enough - current framing of Auto PLI needs to stay closely aligned with the moment India is in.… https://t.co/EcIM5Wbpal
— Tarun Mehta (@tarunsmehta) April 30, 2026
He noted that the electric two-wheeler ecosystem in India has evolved through contributions from both traditional players and electric-first companies. Startups, in particular, have pushed innovation boundaries and helped create a competitive and dynamic EV market.
"Today in many many markets it is the ‘new age EV companies’ that are industry leaders in not just innovation and tech, but in absolute volumes and market shares," Mehta added.
Citing Ather Energy as an example, he said the company has already employed over 4,000 people directly and tens of thousands indirectly in their channels and supply chains. It has invested thousands of crores in R&D and capital expenditure and is now investing Rs 2,000 crore in a new greenfield facility in Maharashtra.
"This is literally what PLI was hoping as an outcome and is being realised by a non-PLI holder, against all odds," he said.
Mehta also challenged the assumption that startups lag in Domestic Value Addition (DVA). He emphasised that DVA benchmarks are similar for both PLI and non-PLI players, and startups have consistently driven indigenous development, in some cases even surpassing the broader industry.
However, he warned that the current policy framework prioritises "legacy scale" over EV-specific innovation. This, he said, places startups at a 13–16 per cent cost disadvantage at a time when they are heavily investing in building capabilities.
"An EV policy architecture that defines champions primarily through legacy scale, not even scale within the EV industry, can create an unintended imbalance," Mehta said.
Using a metaphor, he described the EV ecosystem as a train where legacy businesses are the bogeys and startups are the engine.
"You cannot take the engine out of the equation and hope for the bogeys to move forward themselves," he remarked.
Mehta stressed that if India aims to lead in electric mobility, policies must recognise where innovation is actually happening. Much of the progress in indigenous platforms, battery systems, software, and localisation, he said, is being driven by electric-first companies.
He concluded by calling for a recalibration—not a complete overhaul—of the PLI scheme. "More flexible eligibility, aligned with localisation and R&D intensity, can help ensure we are building long term capability, not just near term scale," he said.
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