[Hume]

This changes everything!! Tesla incoming. Others to follow?

India has paved the way for the likes of Tesla Inc. to enter the country with its new EV policy. The Narendra Modi government has approved an electric-vehicle policy to promote India as a manufacturing destination for electric cars, according to a notification on Friday.

⁠Original equipment manufacturers setting up EV plants in India to be allowed limited imports of cars at lower duty.

A customs duty of 15% would be applicable on vehicle worth $35,000 and above for a total period of five years

⁠A minimum investment of Rs 4,150 crore is required, but there's no cap on maximum investment.

⁠OEMs have three years to set up a plant and start production of EVs. ⁠Domestic addition to be reached within five years.

A localisation level of 25% by the third year and 50% by the fifth year will have to be achieved.

The duty foregone on the total number of EV allowed for import would be limited to the investment made or Rs 6,484 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 of $800 million or more.

Source

[jillako]

Very interesting! It would seem to be close to what Tesla has been pushing for.

[vishal9999]

Originally Posted by jillako

Very interesting! It would seem to be close to what Tesla has been pushing for.

It would RIP for BYD since govt would not want Chinese investment in India under new EV policy / PLI scheme and would have to follow heavy taxation import route only.

[v01d]

Originally Posted by vishal9999

It would RIP for BYD since govt would not want chinese investment in india under new ev policy /PLI scheme and would have to follow heavy taxation import route only.

I think this opens doors for BYD. Earlier, GoI had rejected BYD's proposal for setting up a factory in India. But now this policy does not state anything specific for China, right? As long as the investment numbers are met, India is offering a level playing field imo.

Given the fact that BYD has registered Dolphin and Dolphin Mini in India, I'd say they're the ones who'd strike first.

[Way2Jimny]

Originally Posted by v01d

I think this opens doors for BYD. Earlier, GoI had rejected BYD's proposal for setting up a factory in India. But now this policy does not state anything specific for China, right? As long as the investment numbers are met, India is offering a level playing field imo.

Given the fact that BYD has registered Dolphin and Dolphin Mini in India, I'd say they're the ones who'd strike first.

Megha Engineering who partnered with BYD is in the top list of electoral bond investors.
I don't think BYD's investment will be stopped any more.

[darkgamer]

The policy is really weird and a clear case of lobbying.

Imported EVs < $35000 now will have import duty of 70% regardless

Imported EVs >= $35000 now will have import duty of 15% if the company invests $500M in India.

This is clearly singling out Tesla. IMO the policy should have included cheaper vehicles too, luxury cars should attract higher tax

[sri_tesla]

Originally Posted by Way2Jimny

Megha Engineering who partnered with BYD is in the top list of electoral bond investors.
I don't think BYD's investment will be stopped any more.

BYD partnered with Olectra Greentech for EV buses to provide technology (motors, batteries, etc...) and was bought by MEIL (Megha Engineering). If BYD is allowed to setup their own manufacturing units, why would it help the MEIL? With this new policy, there is no mandatory clause to partner with local company. Also, those electoral bond investments are into regional parties.

[Hume]

Originally Posted by darkgamer

This is clearly singling out Tesla. IMO the policy should have included cheaper vehicles too, luxury cars should attract higher tax

From what I can understand from the policy information, while it's clearly tailor-made for Tesla, anyone who is in a place to take advantage can do so and it's good since it's an incentivized scheme. Bodes well for the country too.

It should disrupt the mid to premium space more than the low cost vehicles since there's a cap of 8,000 per year which, while not small isn't significant either.

Someone who can bring a good balance of premium vehicles that CAN ALSO sell in good numbers can take advantage of this provided they invest of course.

On the other hand, I don't see too many super premium players take advantage of this since they can't sell large enough numbers to benefit from an investment scheme anyway.

[TorqueIndia]

Very good guidelines complementing both foreign and local manufacturers.

Since majority of our EV imports to be offered from EU and Korea, this will open a wide variety of EVs from TESLA, VW, SKODA , HYUNDAI, KIA, CITROEN, BMW, BENZ, AUDI, PORSCHE AND JLR since most of these will eventually will set up EV related investment in India.

Both MG & BYD might have to wait for their overseas plants in UK or NA it seems, as currently their plants are in China only, awaiting confirmation on Chinese imports.

Indian manufacturers like TML and Mahindra are protected with > $35K bracket.

Also even Toyota can have 8-10% increase in their BZ4X sales with 8000 units sales in India, if they commit EV related investments.

Expecting price cuts on both Ioniq 5 and EV6 too.

[sarathlal]

Does this apply to existing players in India who have CBU/CKD EVs in their lineup?
Like Volvo, Hyundai etc

[varunswnt]

Originally Posted by Way2Jimny

Megha Engineering who partnered with BYD is in the top list of electoral bond investors.
I don't think BYD's investment will be stopped any more.

Sometime back I had written on BYD and MEIL JV i.e. Olectra.

Originally Posted by varunswnt

Olectra Greentech Ltd. is JV between Hyderabad based Megha Engineering and Infrastructures Ltd. (MEIL, privately held) and Chinese EV manufacturer BYD. IMO, Olectra does not have any intention to emerge as an independent EV manufacturer as a result of JV experience, it could be a mere front face of BYD. Olectra seems to be purely a contract manufacturer of BYD buses. If BYD wraps up, Olectra might vanish into thin air.

Olectra awarded Letter of Intent worth Rs 10,000 crore for 5150 e-buses by MSRTC

EveyTrans Private Limited, a MEIL group company to run Olectra’s e-bus on Pune-Mumbai route

BYD tells India partner it wants to drop $1 bn EV investment plan: Sources

BYD eyes India passenger EV assembly

BYD plans to drop US$ 1-billion EV investment plan, informs India JV partner: Report

Olectra Greentech’s Partnership With BYD Motors And Megha Engineering in India Rejected

https://olectra.com/

https://www.meil.in/olectra-greentech

MEIL - Turnover

Zaubacorp-MEIL

Zaubacorp-Olectra

‘CRISIL A1+’ rating to the commercial paper programme of MEIL

[Contrapunto]

Originally Posted by darkgamer

The policy is really weird and a clear case of lobbying.

Imported EVs < $35000 now will have import duty of 70% regardless

Imported EVs >= $35000 now will have import duty of 15% if the company invests $500M in India.

This is clearly singling out Tesla. IMO the policy should have included cheaper vehicles too, luxury cars should attract higher tax

Definitely a case of lobbying by the domestic EV makers, since this is the price bracket in which they play. Politically and realistically, I expected nothing else. However, two things will happen:
(1) Tesla (with their mythical new budget car) along with Kia and Hyundai, will start getting a lot of models in the 35k-50k price range, enticing a lot of buyers "shop up"
(2) Domestic manufacturers will also want to go up the value chain (think Sierra EV) to the $40k-50k range. They will be forced to up the game since there they will be competing with the best of the global brands.

Interesting times ahead.

[VRJ]

What’s with the limit to the number of vehicles that can be imported and sold? 8,000 vehicles per year and 40,000 for 5 years is very low for companies like BYD and Tesla. For example, in China February 2024, BYD sold 118,802 vehicles and Tesla sold 30,141. These figures are per month. Not per annum. India is soo behind and the government expects a minimum $500 million in investment for selling 40,000 vehicles in 5 years. What if Tesla sells their quota of cars in the first 2 years? What are they supposed to do in year 3, 4 and 5? Sit idle until their gigafactory is built? There has to be more to this policy. Does this policy also apply to companies that are already selling vehicles in India? BMW and Merc has to invest half a billion to import cars at a lower customs duty? I highly doubt they’ll do it.

Tesla and BYD are possible entries. I wish Rivian comes in as well. Their recent R2, R3 and R3X are absolutely stunning.

[Hume]

Originally Posted by sarathlal

Does this apply to existing players in India who have CBD/CKD EV's in their lineup?
Like Volvo, Hyundai etc

Yes, not limited to new players. Look under section 4 (Eligibility criteria)

Attached policy for reference.

[souravdas808]

Originally Posted by sarathlal

Does this apply to existing players in India who have CBU/CKD EVs in their lineup?
Like Volvo, Hyundai etc

This policy has been specifically tailored for Tesla but others can also take benefits of it if they commit to the stipulated investment. Infact JLR will take full benefit of it as TATAs have been mulling a JLR EV plant in India.