Hangzhou-based automaker Leapmotor is gearing up to penetrate the Indian market with its partner Stellantis after the latter bought a stake in its global operations, ToI reports, citing a source familiar with the matter.
Leapmotor eyes expansion in India
Leapmotor and Stellantis recently provided key details about their upcoming C16 electric SUV to China’s Ministry of Industry and Information Technology (MIIT) to obtain a sales license. As usual, the filing documents leaked before the model’s official debut.
The partners plan to launch their co-developed electric vehicles in other countries beyond China, potentially starting in India. According to the report, Leapmotor and Stellantis may reveal more information about their investment and market entry plans “within the next few weeks.”
“If approved by govt, this will see the launch of budget electric cars developed by Leapmotor into India, intensifying competition in the green cars space.”
Unnamed source
India’s new policy continues to entice foreign automakers
India has advanced as an attractive investment zone in the electric vehicle space since the introduction of its new policy.
Under the new policy, the government agreed to reduce taxes to as low as 15% on certain EVs imported by foreign automakers. However, they must commit to investing at least $500 million in local manufacturing and start operations in three years.
For comparison, the country currently inflicts an import tax of 70% or 100% on electric vehicles, depending on their value.
“The Government of India has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.”
India’s Ministry of Heavy Industries said in a press release
Since then, numerous major players have voiced plans to invest in India’s electric vehicle industry. Some of these global automakers are Tesla, Hyundai, and BYD, among others.
All that said, it is unsurprising that China’s Leapmotor has also grown a significant interest in the Indian market.
Potential hurdles
Despite having Stellantis’ support, Leapmotor may still face significant challenges in its plans to enter the Indian market.
Stringent checks on investments from automakers that originate from China remain, according to the report.
In fact, these checks have already witnessed Chinese EV giant BYD struggle to enter the Indian market. BYD reportedly failed to secure the government’s approval of its investment proposals despite making a deal with a local partner.
Notably, India is not the only country that has imposed stringent standards on Chinese investments. The European Commission is currently conducting an anti-subsidy probe into China-made electric vehicle imports to protect its domestic industry.
