Latest Car News in India

Monday, July 08, 2024

By Kamal Swami

Government To Tweak It’s Electric Vehicle Policy

According to recent reports, the government of India is speculating to tweak its existing policy for electric vehicles. The new tweaks are reported to benefit the existing electric manufacturers. The new policy is expected to favour new players. The proposed changes will be revealed in the Union Budget scheduled for release on July 23, 2024. The government's consideration of policy modifications comes during uncertainty regarding US EV maker Tesla's plans to establish a factory in India. The main objective of the new policy is to balance incentives for electric vehicles and those powered by internal combustion engines (ICE).
Reports reveal that more than half a dozen automakers, including Volkswagen-Skoda, Hyundai-Kia, and VinFast, have reportedly expressed interest in the updated policy, known as the Scheme for Manufacturing of Electric Cars (SMEC). Details of the SMEC. Under the SMEC, the government has outlined provisions for importing completely built-up (CBU) EVs with a minimum cost, insurance, and freight (CIF) value of $35,000 at a reduced import duty of 15% for up to five years. This incentive will be given to manufacturers on the condition to invest at least $500 million in the construction of new manufacturing plants.
Initially, the SMEC was restricted to investments in brand-new EV plants to evaluate the extent of vehicle component localization. The scheme mandates that companies manufacture EVs with at least 25% of components sourced locally, increasing to 50% by the fifth year of investment. These proposed policy adjustments highlight the government's evolving approach to encourage the growth of the EV sector while protecting the interests of established automakers.

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