India Announces Reduced Import Taxes for EV Carmakers Committing to Local Production
In a strategic move to accelerate the adoption of electric vehicles (EVs) and attract foreign investment, India announced on Friday a significant reduction in import taxes for certain electric vehicles. This incentive is available to carmakers willing to invest a minimum of $500 million and establish domestic manufacturing within the next three years.
This policy shift is expected to intensify competition for India’s domestic automakers as international players like Tesla and VinFast eye the world’s third-largest car market. Despite a global slowdown in EV growth, India is pushing to expand its electric vehicle market share from last year’s 2% to an ambitious 30% by 2030.
Tata Motors, which currently holds over 80% of India’s electric car market, has announced plans to expand its EV portfolio to 10 models in the next 3-4 years. The company aims for EVs to represent 25% of its total car sales by 2025, a significant increase from last year’s 9.3%. Tata Motors’ latest offering is the new version of its Nexon electric SUV, starting at 1.5 million rupees ($18,000). In 2021, the company secured a $1 billion investment from TPG’s Rise Climate Fund, valuing its EV division at approximately $9.1 billion.
Mahindra and Mahindra anticipate that electric models will account for 20%-30% of its SUV sales by March 2027. The company has already introduced an electric version of its XUV 400 SUV and plans to launch new electric SUVs starting in 2025. Mahindra has raised around $400 million for its EV unit from investors including Singapore’s Temasek and British International Investment.
Hyundai Motor India is set to introduce five EV models by 2032, supplementing the two SUVs it currently offers. The company also plans to expand its charging infrastructure to 439 stations by 2027. Hyundai has committed nearly $4 billion in investments for the Indian market over the next decade.
Maruti Suzuki India, the nation’s leading automaker in sales, is preparing to launch six EV models by 2030. Suzuki Motor, which has a majority stake in Maruti Suzuki, announced that their first battery EV will roll out from the Gujarat plant by the end of 2024.
Entering the EV race, JSW Group has unveiled plans for electric vehicle and battery manufacturing projects worth 400 billion rupees ($4.82 billion) in Odisha. The conglomerate is also reportedly in discussions with Volkswagen for technology and component supplies for its EV venture.
As India positions itself as a key player in the global EV market, these developments signal a transformative era for the automotive industry, with sustainability and innovation at the forefront.
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