E-Vehicle policy approved: Check key features

• The Government of India has given its nod to a comprehensive scheme aimed at positioning India as a prime hub for manufacturing state-of-the-art e-vehicles within its borders. The policy is crafted to entice investments from renowned global electric vehicle (EV) manufacturers, fostering the growth of the domestic e-vehicle industry.
• This initiative is set to furnish Indian consumers with access to cutting-edge technology while bolstering the Make in India campaign. It will invigorate the EV ecosystem by fostering healthy competition among industry players, leading to heightened production volumes, economies of scale, and reduced production costs. Moreover, it is anticipated to curtail crude oil imports, mitigate trade deficits, abate urban air pollution, and yield positive impacts on public health and the environment.

Key features of the policy include:

• Minimum required investment of Rs 4150 Cr (∼USD 500 Mn)
• No upper limit on investment
• Manufacturing timeline: 3 years for establishing manufacturing facilities in India and initiating commercial production of e-vehicles, with a target of achieving 50% domestic value addition (DVA) within 5 years.
• Gradual increase in domestic value addition (DVA) during manufacturing, aiming for a localization level of 25% by the 3rd year and 50% by the 5th year.
• Application of a customs duty of 15% (equivalent to CKD units) for a duration of 5 years.
• Import allowance for vehicles with a CIF value of USD 35,000 or higher.
• Limitation of the total number of EV imports based on either the total duty foregone or investment made, whichever is lower, capped at ₹6,484 Cr (equivalent to the incentive under the PLI scheme).
• Import of not more than 8,000 EVs annually under this scheme, with the carryover of unutilized annual import limits permitted.
• Requirement for the company to furnish a bank guarantee in support of the investment commitment, which will be invoked in case of non-fulfillment of DVA and minimum investment criteria outlined in the scheme guidelines.

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Published date : 15 Mar 2024 05:38PM