New EV policy may allow ongoing investments for incentives, Vinfast to benefit

livemint.com:

New Delhi: The government is likely to allow electric vehicle (EV) makers to benefit from a new policy that was announced this March, even if their investments were made earlier, according to two officials aware of the development. Such a move would benefit Vietnam's EV maker VinFast, which had announced in January that it would build an EV plant in India, the first official cited above said on condition of anonymity, adding that the new policy may attract a few more global EV makers to manufacture in India.

The cut-off date to be included in the new policy is likely to be “some month of 2023", and a formal announcement is likely by August, the first official said. Currently, the Centre is preparing standard operating procedures (SOPs) and rules to implement the new EV policy.

As per the original guidelines announced in March 2024, only companies investing in greenfield facilities for manufacturing EVs from the date of approval under the scheme within the next three years would be eligible for incentives. An email sent to the heavy industries ministry was unanswered till press time.

In January, Vietnamese EV maker VinFast Auto Ltd announced a plan to build a manufacturing facility in Tamil Nadu at an investment of $2 billion, with an initial investment of $500 million. The officials cited above said that a change in the cut-off date under the new EV policy can make Vinfast eligible to claim incentives for its investments.

Analysts say such a move would send a positive signal to foreign investors. “It demonstrates the government's commitment to foster a business-friendly environment by being flexible and responsive to the needs of potential investors," said Saket Mehra, partner and automotive sector leader at Grant