[Hume]

BMW and other German automakers express fear over new EV policy favoring new entrants

Source

There's some fuss from existing players naturally :

After the Modi-led government announced a new incentive scheme to push investments into electric vehicle manufacturing, German and some other multinational companies expressed their concern that they may not get a “level-playing field” as special import duty rates would be given only to new entrants but may not be extended to existing players, reported ToI.

Auto giants such as BMW, the Volkswagen group and Mercedes-Benz are already considering their official position on the matter, with their Indian subsidiaries briefing global headquarters about the new tax regime that has been announced by the Indian govt last week, sources told TOI.

Some confusion whether the policy is extended to existing players or only to new entrants! Not sure why since the policy doesn't explicitly state that it's for new entrants anywhere.

Other companies such as Korean Hyundai and Kia, apart from some of the Indian homegrown makers, feel their “early investments in the electric space should be counted” retrospectively. “The companies feel that they should not be ‘penalised’ just because they were the early ones to invest for electric vehicles production and localisation in India in line with govt’s thinking. The companies want govt takes into account funds they have already put in towards green technology in their local set-ups here,” one of the sources said to ToI.

Not very dissimilar to how early-adopting consumers feel when they get left out of future upgrades or discounts.

[shortbread]

Originally Posted by Hume

BMW and other German automakers express fear over new EV policy favoring new entrants

There's some fuss from existing players naturally :

Some confusion whether the policy ......

This sort of thinking by legacy manufacturers is the precise reason why others have runaway in the EV race. This apprehension to invest and commit, or the need for even more government incentives?!

[84.monsoon]

Originally Posted by shortbread

This sort of thinking by legacy manufacturers is the precise reason why others have runaway in the EV race. This apprehension to invest and commit, or the need for even more government incentives?!

Totally agree. I don't see what all the fuss is about, CKD kits are already taxed at the same rate of customs duty, i.e., 15%. So those manufacturers who have already invested in assembly operations continue to enjoy parity with the new ones (who are just entering with an intent to invest and commission local manufacturing/ assembly shorlty), and are no worse off.

All that the Government is doing, is creating a level paying field for new entrants who are handicapped for the first couple of years, until their local manufacturing comes on stream. There are guardrails to ensure low cost EVs don't flood the market and make local players who are competing in the lower end of the price spectrum (15-25 lakhs) uncompetitive.

This move also ensures local manufacturers do not get greedy with EV pricing. Tesla, VW, MG or other players who will probably invest in India based on the new scheme, can bring in their entry level semi-luxury vehicle at $35,000 (INR 29 lakhs) and pay 15% import duties and be able to sell their vehicle at 35 -38 lakhs with a decent profit. So, if M&M wants to price the XUV.e9 at a similar price point, it will struggle, as it will be hard to match the quality and technology of the semi luxury import. Instead, if M&M can offer XUV.e9 at 25 lakhs, there will be enough takers. In this way, the scheme creates a ceiling on how much domestic players can charge for their EVs.

[souravdas808]

Originally Posted by 84.monsoon

Totally agree. I don't see what all the fuss is about, CKD kits are already taxed at the same rate of customs duty, i.e., 15%. So those manufacturers who have already invested in assembly operations continue to enjoy parity with the new ones (who are just entering with an intent to invest and commission local manufacturing/ assembly shorlty), and are no worse off.

All that the Government is doing, is creating a level paying field for new entrants who are handicapped for the first couple of years, until their local manufacturing comes on stream. There are guardrails to ensure low cost EVs don't flood the market and make local players who are competing in the lower end of the price spectrum (15-25 lakhs) uncompetitive.

This move also ensures local manufacturers do not get greedy with EV pricing. Tesla, VW, MG or other players who will probably invest in India based on the new scheme, can bring in their entry level semi-luxury vehicle at $35,000 (INR 29 lakhs) and pay 15% import duties and be able to sell their vehicle at 35 -38 lakhs with a decent profit. So, if M&M wants to price the XUV.e9 at a similar price point, it will struggle, as it will be hard to match the quality and technology of the semi luxury import. Instead, if M&M can offer XUV.e9 at 25 lakhs, there will be enough takers. In this way, the scheme creates a ceiling on how much domestic players can charge for their EVs.

This is one of the best thought out EV policy unveiled. Didn't expect this much competence from Govt babus. This protects lower cost mass market, gives the premium segment customers a world class choice for what they spend, gives new entrant players a level playing field, also keeps mass market EV prices from domestic players in check and make them more competitive and competent.

[antz.bin]

Let them do what they want. Even if they don't invest in capacity, they will lose their duty benefits couple of years down the line if they do not meet localisation criteria. Criteria that will require additional investment to fulfill anyways.

Give them the headstart that they have built for themselves prior to the policy. In 5 years time, we will anyways know who survives.

[sri_tesla]

Originally Posted by souravdas808

This is one of the best thought out EV policy unveiled. Didn't expect this much competence from Govt babus.

Not just this. All the EV policies taken in the last few years have been some of the best in the world. 5% GST, substantial subsidies for 2 and 3-wheelers per kWh, buses, taxis, competitive auctions for electric buses, etc... are some of the best policies taken in the last few years. All these are helping advance EV adoption a lot. There are similar such policies like LED bulb auctions, solar and wind power auctions which are greatly helping the energy sector and bringing the prices of solar and wind power substantially and improving the different state discom's financial health.

[souravdas808]

Originally Posted by antz.bin

Let them do what they want. Even if they don't invest in capacity, they will lose their duty benefits couple of years down the line if they do not meet localisation criteria. Criteria that will require additional investment to fulfill anyways.

Give them the headstart that they have built for themselves prior to the policy. In 5 years time, we will anyways know who survives.

But do we want companies that would run away after 5 years leaving existing customers high and dry? We are thinking about today, think about 5 years from now. If a company threatens to leave without extension of duty concession, govt will come under pressure with job losses, negative business sentiments, foreign technology grip on Indian market. It's easier think that it will all go smoothly than it actually will.

[fazalmirza]

Speculation of a proposal to reduce GST on hybrids from 42% to 12%

https://youtu.be/hhl3JGgP8Ac?si=Ot6vnOxVAQ3FLnGe

Electric cars vs hybrid cars running cost

https://youtu.be/OvbWETFuKz0?si=O7p9HqCOnJ-Eb0Cx

Basically, in the these two videos made by different youtubers, there is a discussion on proposed pro-hybrid policy (video 1) and benefits of a hybrid cars based on running cost (video 2).

Perhaps, my favorite minister, Nitin Gadkari, has heard my pleas in favour of the same. Until, full electrification takes place in the next few years.

[Shresth_EV]

Originally Posted by fazalmirza

Speculation of a proposal to reduce GST on hybrids from 42% to 12%

The GST on all hybrids is 28% only, whether conforming to 4m rule and 1.2P/1.5D or those falling in >4m and engines >1.2P/1.5D (pretty much entirety of the hybrid lineup in the country, whether GV/Hyry or Camry/hycross/lexus

It’s the additional 15% cess on >4m >1.2P/1.5D which brings total tax to 43%



https://www.siam.in/cpage.aspx?mpgid...8&pgidtrail=85

The quickest way to offer hybrid for cheaper is by implementing it on small segment cars like brezza/baleno which so far the “hybrid pioneer” failed to downsize. In fact, non hybrids in this segment has a combined tax of 29% coming from 1% cess in addition to the GST.

Unfortunately, We only get fake hybrids embroiled in tax fraud for this segment.

Perhaps, my favorite minister, Nitin Gadkari, has heard my pleas in favour of the same.

I share that sentiment with you but this recent “GST reduction” news has resurfaced only due to a certain interview (if you could call it that) by ODMAG at Bharat Rising summit. https://x.com/odmag/status/177029510...KiRyn52BjJWtuw

That’s what has sent the dust flying amid otherwise dry season for auto news. What he said in the interview is nothing new, he has made that suggestion even in 2019 (and multiple times in between) : https://www.carandbike.com/news/niti...as-evs-2095949

This was just before the 36th GST council meeting which reduced EV GST from 12% to 5%. Since then, there have been 15 meetings (51st in Aug’23) but to no avail.

[volkman10]

Mercedes-Benz, BMW and Audi may steer clear of India's new EV policy.

Link:

[whitewing]

India's push for EVs may lead to large-scale entry of Chinese firms in domestic mkt: GTRI

"India's decision to allow Chinese car makers in India and cutting import tariffs on electric vehicles (EVs) will benefit Chinese manufacturers directly or indirectly being the dominant suppliers of EV batteries. Supply chain dependence on China will sharply increase even when non-Chinese companies (Tesla, Vinfast) set shop in India,"

https://www.msn.com/en-in/autos/news...estic-mkt-gtri

Given the dominance of the Chinese in the whole EV space, this is not surprising. But needed to be said.

[Turbanator]

These are sales figures for February.

https://www.team-bhp.com/forum/elect...tion-data.html

Though we can say that the future does seem bright, it might be too much for Tesla to commit to given the average sales price of their present cars. Let's accept that the single biggest differentiator for Tesla, globally, has been the assisted drive features. I doubt any of that's going to work here given the way we drive.

[souravdas808]

Originally Posted by Turbanator

These are sales figures for February.

https://www.team-bhp.com/forum/elect...tion-data.html

Though we can say that the future does seem bright, it might be too much for Tesla to commit to given the average sales price of their present cars. Let's accept that the single biggest differentiator for Tesla, globally, has been the assisted drive features. I doubt any of that's going to work here given the way we drive.

Elon said they will set up a factory in India if India allows to sell Telsa cars in India first. That's what India has paved way for. If factory is not in the plans, it doesn't make sense to allow foreign made cars at 15% duty.

[extreme_torque]

Originally Posted by Turbanator

These are sales figures for February.

https://www.team-bhp.com/forum/elect...tion-data.html

Though we can say that the future does seem bright, it might be too much for Tesla to commit to given the average sales price of their present cars. Let's accept that the single biggest differentiator for Tesla, globally, has been the assisted drive features. I doubt any of that's going to work here given the way we drive.

I dont think they are looking at India to manufacture and sell Model 3 and Y's of the world in volumes. It will be for their upcoming so called Model 2 which is expected to cost around $25k USD and has the potential to do decent volumes and also exports. That said, if you asked me as an investor in Tesla, whether to invest in India or not, my answer would be, not yet not now.

[volkman10]

JSW and MG India could consider importing high-end premium electric cars, to apply for PLI auto & Advanced Chemistry Cell PLI schemes.

JV to work towards achieving at least 90% sales from sub ₹20-21 lakh vehicles.