Budget 2019: Now that Finance Minister Piyush Goyal’s budget speech is done with, we’re all scrambling to find out what effect will the new financial year’s budget components have on our lives directly. Good news is that the recommendations made by the auto industry body Society of Indian Automobile Manufacturers (SIAM) regarding custom duty on import of electric vehicle components have been materialised which will have a two-part effect – a) it’ll provide a boost to assembling EVs in India and also slash the price tags on these EVs by a significant margin.
The custom duty on vehicle parts and components imported for assembly has so far been 15 to 30 percent. But now, the government has drastically lowered it to 10 to 15 percent. This decision will help manufacturers import EV components at prices almost half of what they paid under the previously applicable custom duty.
Expect prices of EVs built by manufacturers like Mahindra and Tata Motors to be lowered. Mahindra retails the e2o Plus, e-Verito and is also set to launch its first all-electric SUV the eKUV100 this year, followed by an all-electric version of the Mahindra KUV300 next year.
Tata Motors, on the other hand, has already supplied a number of Tata Tigor Electric units to Energy Efficiency Services Ltd (EESL) and is set to launch it commercially this year. Hyundai will also launch its first all-electric SUV, the Kona in India this year. The Kona Electric will be assembled in Chennai and the manufacturer had already announced that the price will be under Rs 30 lakh. With the new government announcement on assembling EVs in India though, there may be some more slack in the price tag.
Electric cars launching in India in 2019: New Mahindra and Tata Motors EVs to launch this year
Lowered import duty on electric vehicle components also means two-wheeler manufacturers like Hero Electric, Ather, Twenty Two Motors, Okinawa stand to benefit from lowered expenses on acquiring components and henceforward the benefit to the end consumer with more affordable electric two-wheelers.
Other manufacturers are also planning to launch electric vehicles in India this year. Nissan Leaf and Audi e-Tron are also slated to launch in India this year. However, the prices of these vehicles will not be affected as these will come through the CBU (completely built up) route. The fully built electric vehicles will still attract 60%/100% import duty on passenger vehicles, 50% on two-wheelers and 25% on trucks & buses as they are for conventional vehicles.
