Companies are now required under the revised Electric Vehicle Policy in India to invest a minimum of $500 million. They will have three years to set up local facilities for the manufacturing of electric vehicles (EVs).
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Electric Vehicle Policy India
The new regulation, which might support Tesla’s market entrance aspirations, requires corporations to spend a minimum of Rs 4,150 crore in the nation. It gives them three years to build up local manufacturing for EVs with at least 25% of the components supplied locally.
Businesses that fulfill these conditions will be able to import 8,000 electric vehicles annually at a 15% import tariff on vehicles priced at $35,000 and more. Depending on the car’s worth, India taxes imported vehicles at a rate of between 70% and 100%.
EV Policy for New Entrants
The Made in India movement is strengthened by the newly announced EV policy for new entrants, which includes conditions for bank guarantees, a minimum investment commitment, and local value addition. This will facilitate India’s EV ecosystem’s acceleration. We plan to release our Born Electric SUVs with cutting-edge technologies in January 2025.
The Indian government has set many challenging goals to increase the country’s EV adoption rate. For instance, by 2030, the government wants 30% of all new car sales to be electric vehicles. Here is a brief rundown of the policies’ contents: –
- Minimum investment required: Rs 4,150 crore, with no upper investment cap.
- Timeline for manufacturing: It will take three years to establish production plants in India, begin producing e-vehicles for sale, and, at most, five years to achieve 50% domestic value addition (DVA).
- Domestic value addition (DVA) During Manufacturing: A localization level of 25% must be achieved by the third year, and 50% by the fifth.
- The manufacturer must set up manufacturing facilities in India within three years to avoid a five-year customs levy of 15% (which applies to CKD units) on vehicles with a minimum CIF value of USD 35,000 and higher.
- The levy on the total amount of EVs that might be imported will be restricted to the investment made, or, if less, Rs 6,484 crore (the PLI program incentive). If the investment is $800 million or more, a maximum of 40,000 EVs at a pace of no more than 8,000 per year would be allowed. It would be possible to carry over unused yearly import limitations.
- In place of the customs duty waived, the company’s investment promise must be supported by a bank guarantee.
- If the plan rules’ stipulated minimum investment conditions and DVA are not met, the Bank Guarantee will be triggered.
Electric Vehicle Industry in India Rules & Regulations
As of 2024, the following are the important laws and guidelines about electric vehicles in India:
- EV registration: Electric vehicles (EVs) need to be registered with the state’s Regional Transport Office (RTO). EV registration is accomplished in a manner akin to that of traditional car registration.
- EV insurance: A current motor vehicle insurance coverage is required for EV insurance. Every insurance provider with an Indian operating license may provide EV insurance to owners of electric vehicles.
- EV charging: EVs may be charged at home, at private or public charging locations, or both. High-traffic locations like parking lots, retail centers, and gas stations are often home to public charging stations. Businesses or individuals may install private charging stations on their property. EV owners must build a charging station to charge their vehicles at home.
- EV conversion: In India, converting to an electric vehicle (EV) is permissible, provided that the Automotive Research Association of India (ARAI) rules are followed. Conventional automobiles may only be converted into electric vehicles using EV conversion kits that have been certified by ARAI.
Challenges facing the EV industry in India
The following are some of the difficulties the Indian EV market is facing:
- High cost of EVs: In India, EVs are more costly than regular cars. This is because the most costly part of an EV is its battery, which is quite expensive.
- Lack of charging infrastructure: In India, there is a dearth of infrastructure for EV charging. EV owners find it challenging to charge their cars as a result.
- Range anxiety: The worry that the battery may die before arriving at the destination is known as range anxiety. This is a serious worry for owners of electric vehicles, particularly those who make lengthy travels.
The Indian government is tackling these issues head-on. For instance, the building of charging stations and the purchase of electric vehicles are subsidized by the government. The Indian government is also attempting to increase the country’s capability for battery production.
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