The Heavy Industries Ministry has invited Tesla CEO Elon Musk and other major global and domestic EV manufacturing companies for deliberations on the Electric Vehicles Policy on Tuesday. The meeting is to finalize the guidelines for the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI) or EV policy. According to the news of Financial Express, this is the second round of consultation on guidelines.
Why is EV policy special?
According to the news, the EV policy is designed to attract global auto manufacturers and strengthen domestic manufacturing capabilities. This policy encourages electric vehicle manufacturing companies to set up production facilities in India. It also mandates significant investment in local manufacturing and supply chains. According to the proposed guidelines, the domestic value addition (DVA) will be calculated as per the Production-Linked Incentive Scheme for Automobiles and Auto Components (PLI-Auto). This includes expenditure on research and development, construction of EV charging infrastructure and will qualify as eligible investments under the scheme.
what’s in the offer
The EV policy also proposes a reduction in import duty for EV manufacturers who commit to invest at least $500 million (about Rs 4,150 crore) in India, with a DVA of 25% more within three years of operation. 50% is to be achieved by the fifth year. For eligible manufacturers, the import tax on EVs priced above $35,000 CIF (cost, insurance and freight) will be reduced to 15% from the current rates of 70% or 100%, Financial Express reported.
These companies can also take part
Global EV companies including Tesla, Hyundai, BMW, Mercedes-Benz, Kia, Toyota and Renault-Nissan as well as Indian automakers like Tata Motors, Maruti Suzuki and Mahindra & Mahindra are expected to participate in the meeting. These companies had participated in the first round of consultation. Given Tesla’s history with India, its possible reconnection is being monitored. Since then, the company’s investment plans in India have been in limbo. Hopefully discussion on this can start again. Vietnam’s Vinfast, which has already committed to make significant investments in India, is another key partner.
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