A Turning Point for EV Manufacturing
The Indian EV ecosystem is entering a decisive phase, and EV manufacturing is at the center of it. Recent policy updates, evolving compliance norms, and a sharper focus on safety are changing how manufacturers plan products, manage costs, and engage dealers. Within the first few years of scale-up, many OEMs and component makers are realizing that success is no longer just about speed to market—it’s about structured growth, traceability, and long-term compliance readiness.
The government’s revised PM E-DRIVE incentives, upcoming lithium-ion battery mandates, and the introduction of a star rating system together signal one thing clearly: the sector is maturing. Manufacturers who align operations early will be better positioned to compete on price, trust, and regulatory confidence.
1. The Evolving Landscape of India’s Electric Mobility Push
India’s electric mobility mission has steadily moved from experimentation to execution. Early adoption was driven largely by incentives and demand for affordable last-mile transport. Now, policy direction is encouraging higher-quality builds, safer vehicles, and predictable supply chains.
This evolution directly affects production planning, vendor management, and dealer engagement. For manufacturers, it’s no longer enough to respond reactively to policy updates. The winners will be those who can translate regulatory signals into operational decisions quickly and accurately.
2. PM E-DRIVE Scheme: Revised Incentives Explained
The Ministry of Heavy Industries’ update to the PM E-DRIVE scheme brings both opportunity and urgency.
Updated incentive structure:
- FY 2024–25: ₹5,000 per kWh (capped at ₹25,000 per vehicle)
- FY 2025–26: ₹2,500 per kWh (capped at ₹12,500 per vehicle)
- Total allocation:
- ₹2.55 crore for e-rickshaws and e-carts
- ₹857 crore for L5 e-3 wheelers
These numbers clearly show a front-loaded incentive strategy. Manufacturers who optimize product configurations and pricing in the earlier phase stand to gain more substantial benefits.
3. How Incentive Phasing Impacts Product Planning
The gradual reduction in per-kWh incentives means cost structures must evolve quickly. Bill of materials optimization, battery sourcing strategies, and production efficiency become critical.
From an operational perspective, manufacturers need:
- Accurate cost visibility per variant
- Real-time tracking of incentive eligibility
- Forecasting tools that model margin changes across fiscal years
This is where structured digital systems quietly become enablers. Many growing players are already leaning on ERP platforms like DigiSec ERP to connect product design, procurement, and finance without disrupting agility.
4. Dealer Engagement Under the New Incentive Regime
Incentives don’t just affect factory margins—they shape dealer conversations. Dealers need clarity on:
- Final on-road pricing
- Incentive timelines
- Variant eligibility
Manufacturers who can provide transparent, consistent data to dealers build trust faster. Integrated dealer dashboards, order tracking, and incentive-linked pricing workflows reduce confusion and shorten sales cycles.
5. Draft Rules: Mandatory Lithium-Ion Batteries by 2027
One of the most significant regulatory shifts is the proposed mandate for lithium-ion batteries.
Key timelines:
- Mandatory audits and certification from April 1, 2026
- Lithium-ion batteries mandatory from April 1, 2027
- Speed capped at 25 km/h for safety compliance
This marks a clear move toward standardization and safety, especially in the e-rickshaw and e-cart segments.
6. Compliance Is Becoming an Operational Function
Battery compliance isn’t just an R&D concern anymore. It cuts across:
- Vendor qualification
- Batch traceability
- Quality audits
- Certification documentation
Managing this manually becomes risky as volumes scale. Forward-looking manufacturers are embedding compliance workflows directly into their operations—linking supplier data, quality checks, and audit readiness within a single system. This approach reduces last-minute surprises when certification deadlines approach.
7. The Upcoming Star Rating System: Why It Matters
The proposed star rating system for e-rickshaws aims to improve structural integrity and safety. While details are still emerging, its implications are clear:
- Buyer perception will shift toward rated products
- Dealers may prefer higher-rated models
- Regulatory approvals could become faster for compliant designs
In a competitive market, a higher star rating could quietly become a differentiator, influencing both B2B and B2C decisions.
8. Data, Traceability, and the Role of ERP Systems
As safety ratings, battery audits, and incentives converge, data consistency becomes crucial. Manufacturers need to answer questions like:
- Which batch used which battery supplier?
- Is this vehicle eligible for a specific incentive slab?
- Are all compliance documents audit-ready?
ERP systems designed for manufacturing environments help unify this information. DigiSec ERP, for example, is often used by growing EV manufacturers to connect production, quality, inventory, and finance without adding operational complexity. The goal isn’t digitization for its own sake—it’s readiness.
9. Preparing for Speed Caps and Safety Norms
The proposed 25 km/h speed cap reinforces the government’s focus on safety over raw performance in certain segments. This affects:
- Motor selection
- Controller calibration
- Testing and validation processes
Manufacturers who integrate engineering changes with production and documentation workflows can adapt faster. When design updates automatically reflect in BOMs, work orders, and compliance records, teams avoid costly misalignment.
10. Strategic Advantage of Early Alignment
Policy shifts often create temporary uncertainty—but they also create opportunity. Companies that align early benefit from:
- Better pricing control
- Stronger dealer confidence
- Faster regulatory approvals
- Improved brand credibility
In the long run, disciplined operations matter as much as innovation. Systems that quietly support scale, such as ERP-backed planning and compliance tracking, often make the difference between reactive growth and sustainable leadership.
11. What This Means for Growing and Mid-Sized Manufacturers
For startups and mid-sized players, these changes can feel overwhelming. However, they also level the playing field. Clear rules reward those who build processes early rather than relying on ad-hoc fixes.
Adopting structured tools doesn’t mean losing flexibility. Many manufacturers adopt modular ERP setups—using only what they need today and expanding as regulations and volumes increase.
12. Looking Ahead: Building for the Next Phase of EV Manufacturing
The direction is clear: higher standards, smarter incentives, and greater accountability. Over the next few years, success in EV manufacturing will depend on how well companies integrate policy awareness with operational execution.
Manufacturers who treat compliance, safety, and data transparency as core capabilities—not afterthoughts—will be better equipped to scale confidently. With the right mix of policy alignment, dealer collaboration, and quietly efficient systems like DigiSec ERP in the background, the industry is set to move from rapid growth to sustainable maturity.
Final Thought
The latest government updates are more than regulatory announcements—they’re signals of where the industry is headed. By preparing now, manufacturers can turn policy change into competitive advantage and build a stronger, safer, and more trusted electric mobility ecosystem in India.
