Ather’s Tarun Mehta Flags Startup Gap in Auto PLI Scheme

In a pointed response to the government’s position on the Production Linked Incentive (PLI) scheme, Tarun Mehta, co-founder and CEO of Ather Energy Ltd., has called out what he sees as a structural gap in policy design, one that sidelines startups driving India’s electric vehicle (EV) transition.

Mehta’s remarks come after officials reiterated that the auto-sector PLI scheme is designed for “global champions,” with eligibility thresholds requiring companies to have at least ₹10,000 crore in revenue and ₹3,000 crore in fixed assets. These criteria effectively exclude most EV startups, including Ather, River, and Euler Motors.

Startups are the engine of EV transition

In his tweet, Mehta argued that startups have already delivered on many of the outcomes the PLI scheme seeks to incentivise—such as localisation, advanced technology development, and capacity building. He highlighted that new-age EV companies have spent years investing in product engineering, software, and manufacturing without the advantages of legacy scale.

He described startups as the “engine” of India’s EV shift, suggesting that policy frameworks risk weakening the broader ecosystem if they prioritise incumbents over innovators.

Policy misalignment and cost disadvantage

According to Mehta, the current structure creates a competitive imbalance. Companies that qualify for PLI incentives gain a cost advantage—estimated at 13–16%—over those that do not, potentially distorting market dynamics. He warned that such disparities could influence how the EV market evolves, especially at a time when India is still in the early stages of large-scale electrification.

Call for calibration, not overhaul

Importantly, Mehta did not advocate for a separate scheme for startups. Instead, he called for a recalibration of existing criteria to better reflect the realities of EV-first companies—suggesting metrics such as R&D intensity, localisation levels, and sector-specific scale rather than legacy financial thresholds.

This is not the first time the Ather CEO has raised concerns. He has previously argued that restrictive eligibility norms prevent high-potential EV startups from accessing incentives that could accelerate domestic manufacturing and exports.