The Government of India has introduced a new Electric Vehicle (EV) Policy 2024 to boost the EV industry. This policy encourages foreign companies to establish EV production in India, creating numerous attractive opportunities for Indian investors.
In this article, we will understand various aspects of India’s new EV policy and what it means for investors.
What’s Happening?
Under the electric vehicle policy announced by the Indian government in March 2024, stricter regulations for investment have been decided. This means that vehicle companies from neighbouring countries like China will have to undergo a stringent approval process for their investment proposals. However, existing vehicle companies in India will not need to set up a new company to benefit from this scheme.
This development comes just a few weeks after Tesla CEO Elon Musk cancelled his visit to India in April. Tesla has not yet informed the Indian government of its plans under the new EV policy.
What Does India’s New EV Policy Include?
The new policy includes several incentives designed to attract foreign companies to manufacture electric vehicles in India. For example, under this policy, companies must invest at least Rs 41.5 billion (approximately 500 million USD) and begin production within three years. Additionally, 25% of the vehicle parts must be manufactured in India by the third year, increasing to 50% by the fifth year.
The government has also offered some import duty concessions on electric vehicles but with certain conditions. Import duty on vehicles priced above 35,000 USD has been reduced to 15%. However, this concession is available only for five years and only to companies that set up electric vehicle manufacturing plants in India within three years. Additionally, under this scheme, only 8,000 electric vehicles will be allowed to be imported per year.
What’s in it for Investors?
India is a vast market, and the demand for electric vehicles is expected to grow rapidly in the future. Therefore, investing in this sector could be a lucrative option for investors.
Additionally, since the Indian government aims to ensure that 30% of new vehicle sales are electric by 2030, there will be a significant need for large-scale EV production.
Investors interested in the EV industry should consider investing not only in EV manufacturers but also in related businesses such as battery manufacturers, charging infrastructure providers, and companies designing software for EVs. However, any investment decision should be based on thorough research.
What’s Next?
To promote the electric vehicle industry, the Indian government held a meeting with EV manufacturers in April this year, which included representatives from Tesla. In this meeting, the government proposed the new EV Policy 2024.
According to the government, the next meeting will be held before the end of July. In this meeting, the government will issue draft guidelines and seek feedback and suggestions from EV manufacturers. The government aims to finalise this new EV policy in the coming months.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Discalimer
