Reports say that the new Indian Government EV Policy 2024 will pave the way for leading EV companies of the world, such as Tesla and others, to manufacture their products in India locally. This landmark decision will boost local production by leading EV manufacturers in the world. The new Indian government policy on electric cars will promote the “Make in India” campaign and also provide Indian consumers access to advanced technology.
Tesla could arrive in India early 2024, New EV Policy In-Process by govt of India #teslahttps://t.co/SU1t4gSJ1W #tesla $tsla #elonmusk #evpolicy #india
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What is the New Indian Government EV Policy of 2024? Top 5 Points
The new Indian Government EV Policy of 2024 has the following 5 provisions:
1. Minimum Investment Criteria
To avail the incentives of the new policy, a manufacturer has to invest at least Rs. 4150 crore (or US$500 million approximately).
2. Maximum Investment Limit
The manufacturer can invest as much as it wants. No upper cap for investment is there in this scheme.
3. Manufacturing Timeline
- Within 3-years, the manufacturer has to establish manufacturing facilities in India and also start production of electric vehicles.
- Within 5 years, the manufacturer has to achieve 50% DVA (Domestic Value Addition).
- By 3rd year, it has to achieve a 25% localisation level.
- By 5th year, it has to achieve a 50% localisation level.
- 15% customs duty will be applicable for 5 years on vehicles that have a CIF (Cost, Insurance, and Freight) value of US$35,000 or above. This is the same import rate applicable to CKDs ( Completely Knocked Down) units or car units whose components are imported from abroad but assembled in India.
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Also Read: Government Subsidy On Electric Vehicles In 2024: Check Now!
4. Duty Limit
Whichever is lower between:
- Rs. 6484 crore, which is the extent of incentive given under the PLI scheme, or
- The extent of import duty forgone on the total number of electric vehicles allowed for import under the new 2024 Indian government EV policy in place of the investment made by the EV manufacturing company.
The maximum number of electric vehicles that the EV manufacturing company (such as Tesla) can import under the Indian government EV policy 2024 at 15% customs duty is 40,000 EV units over 5 years. The company can import only up to 8,000 units per year during these five years if the investment value of the EV company is US$800 million or above.
5. Bank Guarantee Requirements and Non-Achievement Clause
- Bank Guarantee Support
To avail of the incentive of forgone customs duty, the investment commitment of the EV company must be guaranteed by a bank.
- Non-Achievement Clause
The bank guarantee will be invocated if the company fails to achieve the DVA or the minimum eligibility criteria of the Indian government EV policy 2024.
Final Words
In an interaction with Andre Konsbruck, the Vice President, Sales Overseas of Audi, he said, “The government seems to be very committed to sustainability and to the electric future.” He made this comment while interacting on the issue of the new Indian government EV policy of 2024.
Also Read: What Is The Future Of Electric Cars In India? Learn More Now
Experts believe that this new policy will help produce world-class electric cars locally in India and allure Tesla or other EV giants to invest in India. In addition, it’ll also reduce the Indian government’s reliance on crude oil in the mid-to-long run. Finally, the new Indian government EV policy will drive India towards a more sustainable and eco-friendly future.
Also Read: Charging Infrastructure For Electric Vehicles In India – Know Now!
