Imported EVs might become cheaper in India soon
What's the story
The Indian government is set to open applications for its flagship electric vehicle (EV) policy, aimed at luring global car manufacturers.
The policy, announced in March 2024, offers a reduced import duty of 15% on any imported EV priced from $35,000. This might lower their prices here.
However, this is only applicable if the manufacturer invests at least $500 million in setting up a local plant within three years.
Process
Policy details and application timeline
The policy allows up to 8,000 cars per year to be imported at the reduced rate.
Applications for this scheme could open as soon as this month and continue until March 15 next year.
India is targeting EV manufacturers such as Tesla, which has long criticized India's high duty regime but is now preparing to sell its cars in the country.
Market dynamics
India's EV market and policy impact
Despite a global slowdown in demand, India remains a hotbed for EVs.
The new policy could further heat up competition for local brands who currently dominate the segment.
However, some conditions have been tightened under the Narendra Modi government to weed out non-serious players.
These include higher financial eligibility and a minimum revenue requirement of ₹5,000 crore in the fourth year and ₹7,500 crore a year later for any applicant approved under the policy.
Requirements
New policy mandates local parts and production timelines
The new EV policy mandates companies to achieve 25% parts localization in cars within three years.
They are also required to start EV production within three years of getting approval.
The Centre has said that investments under the new scheme should go toward building, machinery, research, and a charging network (to a limited extent).