(MENAFN- KNN India)
New Delhi, Jan 13 (KNN)
As India prepares to shape its future in electric vehicle (EV) manufacturing, the Ministry of Heavy Industries has extended an invitation to Tesla CEO Elon Musk and other global and domestic EV players for a high-level consultation on January 16.
This meeting is crucial for finalising the guidelines of the Scheme to Promote manufacturing of Electric Passenger Cars in India (SPMEPCI), often dubbed the EV policy.
The initiative, unveiled in March 2024, aims to attract global automakers while bolstering India's domestic manufacturing capabilities.
It promises lucrative incentives, including reduced import duties for automakers committing to a minimum investment of USD 500 million (approximately Rs 4,150 crore) in India.
Such manufacturers must also achieve domestic value addition (DVA) targets of 25 per cent within three years and 50 per cent by the fifth year.
The policy further incentivises investments in research and development and EV charging infrastructure.
The upcoming consultation has gained significance due to delays caused by the 2024 general elections. This second round of discussions follows feedback from global EV giants like Tesla and Vietnam's VinFast, both of which raised concerns during the initial consultations.
Tesla had previously flagged issues with the DVA calculation methodology and the exclusion of pre-existing investments. Similarly, VinFast, which is constructing a USD 500 million EV plant in Tamil Nadu, urged the inclusion of retrospective investments in the incentives.
Sources indicate that the government has revised the guidelines to address these concerns, potentially broadening the scope to include R&D and charging infrastructure.
Speculation also surrounds the inclusion of retrospective investments under specific conditions, a move that could re-engage Tesla, whose 2024 investment plans in India stalled abruptly.
The meeting is set to witness participation from global leaders like Hyundai, BMW, Mercedes-Benz, and Toyota, alongside Indian stalwarts such as Tata Motors and Mahindra & Mahindra.
Industry observers believe that effectively addressing stakeholder concerns could position India as a premier destination for EV manufacturing, competing with global hubs like China and the US.
However, challenges persist. The policy's stringent investment thresholds and DVA requirements have tempered initial enthusiasm.
Analysts emphasise that overcoming these hurdles is critical for the success of India's ambitious EV strategy.
(KNN Bureau)
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