Budget 2024: EV policy changes likely, already invested automakers may benefit

The government may tweak the EV policy to support automakers who are already invested, since the policy was originally for fresh and new investments.

Published on: Jul 8, 2024, 11:20:29 IST

By HT News Desk | Edited by Abhyjith K. Ashokan

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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.

A view of a public electric vehicle (EV) charging plaza in New Delhi, India (Sanchit Khanna/HT)

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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

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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.

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HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

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