Tuesday, December 7, 2021

India Gov approves incentives to boost EV production

India’s government has approved an incentive scheme of about 260 billion rupees ($3.5Bn) over a five-year period. The aim of this new plan is to boost the production of battery-electric and fuel-cell vehicles and to promote the manufacture of drones in India.

Anurag Thakur, minister of information and broadcasting, told Reuters “The incentive scheme has been designed to help India become a global player in the automobile sector,” adding it would also boost local manufacturing.

The government has said that the incentive scheme is expected to help attract new investment in the auto sector of about 425 billion rupees. The incentives will range from 8% to 18% of the sales value of the vehicles or components. Companies will have to meet certain conditions to qualify such as a minimum investment over five years and a 10% growth in sales each year.

The plan was originally drawn to boost vehicle sales, generally, which have dropped recently, even before the pandemic, with only some added incentives for EVs. Now that Tesla is aiming to build a plant in India, however, the focus of the incentives has been redrawn to more focus on makers of electric vehicles and their suppliers.

Tesla set up a subsidiary in Bangalore early this year. In February, an Indian regional government confirmed that Tesla was also planning to build a plant on the subcontinent. A plant, whether a complete vehicle production or an SKD or CKD assembly, could make sense for Tesla.

The fact that the Californian company’s electric cars are not yet being sold in India is partly due to the high import duties, which almost double the price of the electric sedan. Tesla has repeatedly tried to get the government to budge on this issue.

See also  Tesla in talks with 3 Indian companies for parts supply

Last month we reported that the new Minister of Power and Heavy Industries, Krishan Pal Gurjar, has stated that “no such proposal (to lower import duties) is under consideration” in his ministry. You can read the full article here: Indian Government Rejects Tesla’s Appeal For Lower EV Import Duties

In the new program of incentives, auto parts makers will get receive support to produce components for zero-emission cars as well as for investing in advanced technologies like sensors and radars used in connected cars, automatic transmission, cruise control and other electronics.

Hi I'm Leanne. I'm a big fan of electric cars (drive a Model 3 myself) and support the movement to go electric! I hope you enjoy my Articles here on the website.
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