Stricter localization requirements have been imposed by the government on electric vehicle (EV) producers hoping to receive funding under the PM E-DRIVE program.
According to plan officials, testing agencies will now be able to visit the locations of EV component vendors that supply parts to program participants.
Parts for EVs must be purchased locally. According to a senior source who spoke with ET, “Some components will also need safety testing.” The test agency will have the authority to confirm assembly stations.
The most recent regulations require component suppliers to follow localization standards that treat assembly as manufacturing. Commencing on April 1, 2025, is the new phased manufacturing program (PMP) for electric vehicle (EV) components.
In order to verify that EV manufacturers adhere to PM E-DRIVE regulations, “testing agencies shall have discretion to seek further invoices down the supply chain line,” the official stated.
Completely knocked down (CKD) import of all child parts for components from a single import source is prohibited in order to enforce localization.
During test agency inspections, it is required to show assembly stations doing specific manufacturing and assembly tasks at the supplier’s production facility.
In essence, the government seeks to remove “trader businesses” from the chain of distribution for EVs. This is due to the fact that recipients of PM E-DRIVE will not be able to purchase completed components from domestic providers.
Similar to the Faster Adoption and Manufacturing of Electric Vehicles (FAME) program, which it replaced, the PM E-DRIVE program aims to increase sales of locally manufactured vehicles.
