Mercedes-Benz, BMW and Audi may steer clear of India's new EV policy
India units of luxury car manufacturers such as Mercedes-Benz, BMW and Audi may steer clear of the government’s new electric vehicle (EV) policy, which stipulates a sharp cut in import duty on condition that a $500 million investment is made in local manufacturing.
The luxury car makers that have already been present in India for decades would rather accelerate local assembly of EV models in the country as the money will need to be ploughed in within three years of receiving approval under the scheme, said auto executives. The aforementioned companies didn’t officially comment on investments under the new policy.
Given that luxury car manufacturers have already invested in India through plants and operations, they don’t see much benefit in another large investment for a segment that’s currently less than 2% of the broader car market. Besides, assembling kits in India already allows for a lower duty structure.
“Anybody can assemble any car in India. The duty on CKD (completely knocked down) kits is 15% and this can be done without any commitment of further investments for manufacturers who already have plants for internal combustion engine vehicles,” a senior industry executive said on condition of anonymity. “The new electric vehicle policy has been designed to help new companies such as Tesla and VinFast to set up operations in the first few years before they can start local assembly.”
Under the new EV policy announced March 15, the government will allow the import of completely built-up (CBU) electric cars
