No relief for EV firms as govt takes hard line on localisation

The Ministry of Heavy Industries, through its vehicle-testing agencies, on Thursday instructed electric two- and three-wheeler manufacturers to formally declare they have adequate rare earth magnet inventories and are producing key components — traction motors and electronic throttles — locally, as required under the PM E-DRIVE scheme, Business Standard has learnt.

- DEEPAK PATEL

The directive came amid growing industry concern over supply chain constraints following China's April 4 move to restrict exports of rare earth magnets — critical inputs in traction motors. Automakers had been anticipating temporary relief from localisation rules, arguing indigenisation of certain auto parts in the current scenario was unviable.

The Automotive Research Association of India (ARAI), one of the key testing agencies under the ministry, issued a communication on Thursday requiring companies to sign a declaration affirming that they hold sufficient stock of rare earth magnets and are adhering to the scheme's phased manufacturing programme (PMP) norms. A March 3 notification laid out localisation milestones for two- and three-wheeler manufacturers seeking financial incentives under the PM E-DRIVE scheme.