India Attracts Global EV Players with New EV Policy; Tesla and Other Brands Revs Up for India Debut

News Highlights

• The Centre is aiming to become a global hub for EVs in the coming future.
• Tesla has been leading the campaign against high import taxes on electric vehicles.

India has reduced import taxes on certain electric vehicles. The Centre has introduced a new EV policy that grants global automakers a reduced import tax if they commit to making an investment of at least $500 million and start local manufacturing of electric vehicles within three years. The new EV policy was introduced last week. Prime Minister Narendra Modi said that the latest policy of electric cars will help to increase domestic manufacturing within the next 5 years. The country has now bolstered Tesla's plans for the Indian market. The government has opened the gate for global EV manufacturers to establish manufacturing plants in India. The Centre is aiming to become a global hub for EVs in the coming future.

In India, the electric vehicle segment accounts for 2 percent of overall vehicle sales. In comparison to markets like Europe, China, and the United States, the EV segment in the country is still smaller, and it needs to be expanded to boost sales and EV adoption. There are several EV players who are all set to invest in the Indian EV segment. India is expected to witness major global brands unveil their products in the nation. Several international manufacturers are already selling their EVs in India, including BMW, Mercedes-Benz, Porsche, Audi, Jaguar Land Rover, French auto giant Citroen, Rolls-Royce, MG Motor, Volvo, and more.

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Tesla, a US-based EV brand, is expected to set up its facility in India. For over a year, there have been discussions over Tesla establishing a manufacturing facility in the nation, with multiple states proposing land to the EV marque. As the leading international producer of EVs, Tesla has been leading the campaign against high import taxes on electric vehicles. Its efforts were rewarded when the Centre introduced a new EV policy that grants international companies a reduced import tax if they pledge to invest more than INR 4,000 crore and use components sourced locally in their models. Tesla was at the forefront of the EV segment globally before Build Your Dreams (BYD) replaced it. The auto marque retails various electric cars, such as the Model S, Model 3, and Model Y.

VinFast, a Vietnamese EV startup, has currently invested in Tamil Nadu to set up its first manufacturing plant in the state. The new EV plant is spread across more than 400 acres. The new VinFast EV facility aims to produce 1.50 lakh cars per year. Recently, the automaker filed a trademark for the VF3, its first vehicle for the Indian market.

The Chinese EV marque, Great Wall Motor, expressed its interest in unveiling its models in the country a few years ago. The auto giant is expected to rethink its plans for the Indian EV market after its latest electric vehicle policy offers a great opportunity for international EV players. Great Wall Motor retails large sports utility vehicles in China via the Haval brand. Some of these SUVs were displayed at the Auto Expo in India, held in 2020.

Fisker, a US-based EV startup, has also been gearing up to launch its models in India. The brand revealed its plans to establish its headquarters in Hyderabad, two years ago. However, the EV maker has not revealed further developments in its manufacturing plans for India.