[volkman10]

Govt approves new EV policy, paves way for Tesla's imminent India entry.

As per the mandate, the companies whose credentials have been considered for the selection of applicants under this scheme shall not be allowed to dilute their shareholding (direct or indirect) in the applicant during the tenure of the scheme.

Paving way for the entry of more major global automakers in the country, the Centre today announced a new electric vehicle policy that allows automakers to import cars at a lower customs duty, provided they commit to a minimum investment of Rs 4,150 crore, or US$ 500 million, for manufacturing in India.

“The duty foregone on the total number of electric vehicles allowed for import would be limited to the investment made or Rs 6484 crore (equal to incentive under PLI scheme) whichever is lower. A maximum of 40,000 EVs at the rate of not more than 8,000 per year would be permissible if the investment is USD 800 million or more. The carryover of unutilised annual import limits would be permitted,” according to a press release from the Ministry of Commerce & Industry.

However, the details of “duty foregone” on imports is unclear from the press release. The release further noted that the customs duty of 15 percent would be applicable on vehicles of minimum CIF value of USD 35,000 and above for a total period of five years subject to investment commitment and setting up of a manufacturing facility.

Companies will have to commit a minimum investment of Rs 4150 crore for setting up manufacturing facilities within three years to be part of this policy and start commercial production of electric vehicles with a 50 percent domestic value addition within 5 years at the maximum.

The companies will have to back their investment commitment with a bank guarantee in lieu of the custom duty forgone. The bank guarantee will be invoked if the company fails to make the minimum investment and domestic value addition criteria.

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