India's new EV policy: Accelerating at the right time
EV policy, slashing customs duties on imported cars. This policy concession, announced ahead of the general elections, is an incentive for automobile MNCs, such as the world's largest EV manufacturer, Tesla, to make India a global hub for EVs.
However, the policy comes with strings:
- A manufacturer must commit to invest at least $500 mn and set up a manufacturing facility in India within the first three years.
- Companies can import EVs for five years — capped at 8,000 cars every year — costing upwards of $35,000 at a concessional rate of 15%. Earlier, the import duty was 100%.
- Companies will have to achieve 50% domestic value addition in five years.
The ball is now in the court of global manufacturers, which are eyeing the massive potential in a country that has committed to going net-zero by 2070. With matters heading south in China, it has become imperative for MNCs to derisk their strategies. On the face of it, there is a convergence of interests.
While Tesla has not reacted officially, VinFast Auto, the EV manufacturer from Vietnam that inked an MoU with the Tamil Nadu government in January to set up a facility, welcomed the move. 'This forward-looking policy will help us introduce a wide variety of smart, green, premium-quality SUVs, at inclusive prices, along with outstanding after-sales policies,' VinFast India CEO Pham Sanh Chau said.
BJP-led NDA has once again taken a bold policy stance, albeit with significant risks, such as being targeted by opponents during the election campaign for extending
