The government wants to expand incentives for electric cars after Tesla’s disappointment
India plans to extend electric vehicle incentives to automakers that build models at existing factories in the country, instead of limiting benefits to automakers willing to build new factories, a person with direct knowledge of the matter said. case.
India’s EV policy, which is still being finalized, was originally intended to encourage Tesla to enter the market and produce locally, but the US automaker backed away from those plans earlier this year.
Other foreign carmakers have shown interest in making electric cars in India at existing and new factories, according to minutes of a meeting with India’s heavy industry ministry seen by Reuters. It is hoped that policy changes will encourage EV investment from the likes of Toyota and Hyundai, the source said.
Under the policy announced in March, an automaker that invests at least $500 million (approximately Rs. 42,293 crore) in manufacturing electric cars in India, with 50 percent of components produced locally, is entitled to a huge reduction in import taxes – a decrease to 15 percent compared to 2011. up to 100 percent for a maximum of 8,000 electric cars per year.
The government will now also consider EV investments in existing factories currently building petrol and hybrid cars, said the source who was not authorized to speak to the media and declined to be identified.
However, the electric models must be built on a separate production line and meet local purchasing criteria, the source said.
In case of a new factory, the investment in machinery and tools to build electric cars will be fully counted towards the required $500 million (about Rs. 42,293 crore) even if the equipment is also used to manufacture other types of cars, it said he.
To ensure carmakers are treated fairly, the government will set a minimum EV revenue target for a factory or production line that must be met to qualify for the scheme, he said.
He added that the policy would be finalized by March.
According to minutes of the meeting, Toyota officials asked whether the EV policy would allow investing in a separate assembly line within a plant that produces multiple powertrains. It also sought to understand whether manufacturing and installation of charging stations would be counted as part of the investment requirement of $500 million (approximately Rs. 42,293 crore).
Toyota and the heavy industry ministry did not respond to Reuters requests for comment.
Hyundai asked if the money spent on research and development could be counted as part of the $500 million investment requirement, the minutes showed. The source said it would not be counted.
Hyundai Motor India is awaiting the rollout of the final policy and guidelines, a spokesperson said.
Volkswagen’s Indian division wanted more leeway with regard to the investment term. It was asked whether 75% of the $500 million (about Rs. 42,293 crore) could be invested in the first three years of the five-year plan, instead of 100 percent as currently required. It also sought to understand whether investments by suppliers would be eligible, the minutes showed.
Volkswagen said it is studying the latest EV policy “in detail” and will evaluate a path forward accordingly.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
