The Indian Government announced plans to draft a new electric vehicle policy to encourage more global players to invest in the local industry, Reuters reports citing Union Minister Piyush Goyal’s remarks.
Tesla’s part in the decision
Interestingly, the decision to develop and impose a new policy appears to be largely influenced by Tesla.
The American electric vehicle giant’s negotiations with Prime Minister Narendra Modi advanced to a whole new level compared to their initial talks in the past few years.
Reports from late August also indicated that the government plans to impose an EV import tax reduction policy from 100% to just 15%. In return, automakers must have 40% of the vehicle production domestically.
India’s painful import taxes for EVs have long been the barrier that impedes Tesla from penetrating the local market. In 2021, it attempted to launch its electric cars in the country. However, the government refused to lower import taxes unless Tesla would establish local production first.
Now, it seems the government is exerting extra effort to ensure that Tesla would continue its investment plan in the country. For context, the American automaker aims to build a $24,000 EV for the Indian and other key markets through export.
“We will come out with a policy. As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies.”
Union Minister Piyush Goyal
Unfortunately, Minister Goyal has yet to disclose more details about the policy’s potential incentives for electric vehicles.
India EV sales in August
Electric vehicle sales in India reportedly grew 9% to 1,26,324 units in August 2023 from the prior month, according to EMOBILITY+.
August sales also enabled the local industry to hit a 43% year-on-year growth from the same period last year.
As expected, electric two-wheelers and passenger-type electric three-wheelers largely boosted the sales figures last month with a market share of 89.81%.
See Also:
- Six major states dominated 60% of the Indian EV market in Jan to August period
- Tesla drives India to contemplate import tax cut on one condition, sources reveal
- Maruti Suzuki to launch six new electric vehicles in India
- Foxconn aims to make India its third global EV hub
- Tesla and Indian government negotiations continue to progress
India’s electric vehicle adoption has been remarkably progressive owing to the prevalence of electric two- and three-wheelers. Electric rickshaws enabled the people to have an affordable and sustainable means of transportation. Meanwhile, electric bikes significantly decarbonized last-mile mobility.
However, a $24,000 Tesla can significantly boost the country’s four-wheeler EV sales. That said, it is unsurprising that the government is highly committed to bringing the American automaker into the country.
