EV policy could intensify competition in the long run
₹4,150 crore and manufacturing should commence within three years of receiving approval. Besides strengthening the EV ecosystem, the policy could also boost the Make in India initiative as it mandates domestic value-addition of 25% by the third year and 50% by the fifth. Elara Securities (India) notes that India could become an export hub in the future, given that global automakers are looking to diversify beyond China.
As such, the policy opens the door for companies such as Tesla and Vinfast, a Vietnamese automaker. While this will increase the number of companies in the domestic market, competition will intensify only when manufacturing starts in India. The scheme allows global automakers to import a maximum of 8,000 units a year at a subsidised customs duty rate, subject to conditions.
But this will hardly have a big effect on domestic companies such as Tata Motors Ltd and Mahindra & Mahindra Ltd. Also, Tesla has much higher price points. For instance, Kotak Institutional Equities estimates the landed cost of a Tesla at ₹42-74 lakh, depending on the model, after adjusting for the revised duty structure.
The ex-showroom price of a Tata Nexon (the company’s most expensive model) is about ₹20 lakh. However, Tesla plans to launch a mass-market EV, codenamed Redwood, by mid-2025. It’s expected to be priced at $25,000 (about ₹21 lakh) in global markets.
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