India may make changes to its new electric vehicle (EV) policy to incentivise automakers that have already invested previously, the Economic Times reported, citing unnamed people in the know. HT couldn’t independently verify the report.
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The policy currently only supports fresh and new investments. The new changes may be announced in the 2024 union budget which will be unveiled on 23 July.
Why is the government potentially making changes to the EV policy?
This development comes when US EV maker Tesla still hasn’t committed to building a factory in India.
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The government may consider investments in both EVs as well as vehicles powered by internal combustion engines (ICE), with about half a dozen carmakers such as Volkswagen-Skoda, Hyundai-Kia and VinFast having expressed interest in the new policy called the Scheme for Manufacturing of Electric Cars (SMEC), according to the report.
What are the details of the SMEC?
The government has said that it would allow imports of completely built up (CBU) EVs with a minimum cost, insurance, and freight value of $35,000 at 15% import duty for up to five years. But this is provided the company invests at least $500 million into the building of new plants
{{/usCountry}}The government has said that it would allow imports of completely built up (CBU) EVs with a minimum cost, insurance, and freight value of $35,000 at 15% import duty for up to five years. But this is provided the company invests at least $500 million into the building of new plants
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Initially restricting the SMEC for solely brand new EV plant investments was aimed to assess how much the companies were able to localise vehicle components. The scheme states that companies are required to build EVs with at least 25% of components sourced locally. This limit will increase to 50% by the fifth year of the investment, the report read.