TL; DR
- According to the new EV policy, a qualifying company must have a minimum turnover of Rs. 2,500 crores by the second year of operations.
- Under the new policy, EV makers will have 120 days to apply. Further, they’ll be allowed to import up to 8,000 premium electronic vehicles.
To lure global EV makers, the Indian government is preparing a new EV policy that drastically reduces the import duty on fully built units. Manufacturers that meet certain criteria (set by the government) will only have to pay 15% import duty, which, otherwise, is as much as 110%. However, meeting the government’s conditions might not be possible for all companies.
EV Makers Must Have A Minimum Turnover Of Rs. 2,500 Crores By Second Year
According to the new EV policy, a qualifying company must have a minimum turnover of Rs. 2,500 crores by the second year of operations. Further, it should also meet consecutive revenue milestones of Rs. 5,000 crores by the fourth year and Rs. 7,500 crores by the fifth year of business. In addition to this, the interested EV makers should
Further, the company must invest Rs. 4,150 crores in the market to demonstrate their commitment. Interestingly, any previous investments made by the company will not count toward the criteria, nor will the costs of building and land. Although the new policy reduces the import duty, it seems to be stringent for new players entering the market.
EV Makers Can Import Up To 8,000 Premium Vehicles At The Reduced Rate
Under the new policy, EV makers will have 120 days to apply. Further, they’ll be allowed to import up to 8,000 premium electronic vehicles (priced above $35,000) at the lower rate of customs import duty, beyond which the 110% rate will apply. Companies must establish their manufacturing facilities within three years of their application and achieve 25% domestic value addition.
It is important to mention that these guidelines that constitute the new EV policy haven’t been finalized yet, as they’ve yet to get approval from H.D. Kumaraswamy, the Heavy Industries Minister. Moreover, the updated EV policy demands commitment and, in return, benefits the EV makers with reduced import duty (and lower costs for the consumers).
Tesla could be the immediate beneficiary of the new EV policy, as it is gearing up to sell electronic cars in India. The company has already identified store locations in Mumbai and Delhi. It is also hiring advisory and ground staff for the stores via its official LinkedIn page.
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