Big Boost for Auto Companies: Tata Motors and M&M to Receive Incentives under PLI Scheme
Key Ideas
- Tata Motors and Mahindra & Mahindra are set to receive incentives worth Rs 246 crore under the PLI scheme, boosting their financial performance for FY24.
- The PLI scheme offers incentives of 13-18% for components related to EVs and hydrogen fuel cells, indicating a positive shift towards sustainable automotive technologies.
- Auto stocks surged on January 2, driven by strong sales growth in December and the announcement of PLI benefits, propelling the Nifty Auto index to its biggest single-day gain in six months.
- The PLI scheme has already facilitated significant investments in the automotive sector, leading to substantial incremental sales, with more eligible applicants expected to join soon.
Leading automotive companies Tata Motors and Mahindra & Mahindra are poised to receive incentives worth Rs 246 crore under the Production-Linked Incentive (PLI) scheme for the financial year 2024. These incentives are expected to be disbursed in the fourth quarter of financial year 2025. The PLI scheme, aimed at promoting local manufacturing and boosting the automotive industry, offers incentives ranging from 13-18% for components related to electric vehicles (EVs) and hydrogen fuel cells. Other Advanced Automotive Technology (AAT) components receive incentives between 8-13%. The announcement led to a surge in auto stocks on January 2, with companies like Tata Motors, M&M, Maruti Suzuki, and others experiencing notable gains. The positive momentum was fueled by robust sales figures for December and the promise of PLI benefits. The automotive sector has already witnessed significant investments due to the PLI scheme, resulting in incremental sales. More applicants are expected to join the scheme soon, further driving growth in the industry.