Boosting Electric Vehicle (EV) Production in India

Boosting Electric Vehicle (EV) Production in India

GS PAPER 3

THE HINDU EDITORIAL ANALYSIS

• Policy Stipulations: The government-approved policy aims to position India as a manufacturing hub for EVs, focusing on transitioning to local production. Key provisions include:

  • Reduction of import duty on electric vehicles imported as Completely Built Units (CBU) with a minimum CIF value of $35,000 to 15% for a five-year period, contingent upon setting up a manufacturing unit within three years.
  • Waiver of total duty or an amount proportional to investment made on the total number of EVs imported, capped at 40,000 units over five years.
  • Localisation targets requiring manufacturers to achieve 25% localisation by the third year and 50% by the fifth year.

• Impact on Domestic Players: Domestic players like Tata Motors have expressed concerns, fearing that lowered duties could negatively affect the domestic industry. However, the policy is seen as advantageous for Original Equipment Manufacturers (OEMs) catering to the higher end of the market.

• Catering to Indian Markets: Global players entering the Indian market must consider local factors such as infrastructure, road conditions, and usage patterns. Challenges like limited charging infrastructure and range anxiety need to be addressed for wider EV adoption.

• Need for Charging Infrastructure: The Confederation of Indian Industry (CII) estimates a requirement of at least 13 lakh charging stations by 2030 to support aggressive EV uptake. Addressing charging infrastructure gaps is crucial for encouraging EV adoption.

• Focus on Sustainability: There is a call for the EV ecosystem to prioritize reliability, durability of components, and service support. Sustainable product and system designs, guided by domestic demand, are emphasized over solely competitive products.

• Role of Indian Manufacturers: Indian manufacturers should focus on developing appropriate product and system designs, particularly for two-wheelers, three-wheelers, and four-wheelers, to align with the policy's objectives and guide the Production Linked Incentive (PLI) scheme.