The government of India announced the e-vehicle policy, which aims to promote the country as a leading manufacturing destination for EVs and attract investments from global EV makers.
The policy not only provides incentives, but the impetus on localisation is seen to promote EV makers committing for long-term as well as developing the vendor and necessary ecosystem.
Industry stakeholders have given a thumbs up to the move, here is what they have to say –
Vinod Aggarwal, President, SIAM: “A holistic view has been taken by the Government of India in the best interests of the country. The Indian automobile industry and members of SIAM will adapt to this new policy and remain committed to bring new, innovative & aspirational products and work towards developing a robust EV Eco system in the country.”
Shradha Suri Marwah, President, ACMA & CMD, Subros: “The policy not only aims to attract global EV majors to invest in India but also emphasises significant Domestic Value Addition (DVA) criteria ensuring the creation of a robust supply-side ecosystem. Aligned with the government’s vision of reducing our carbon footprint, promoting sustainable manufacturing, and achieving net-zero emissions by 2070, this policy sets the stage for a vibrant future-mobility global manufacturing hub in India.”
Sunjay Kapur, Chairman, Sona Comstar & Deputy Chair, CII Northern Region: “This progressive step not only solidifies India’s position as a manufacturing hub for EVs but also fosters a conducive environment for global players to invest in our burgeoning market. With a minimum investment threshold and a clear roadmap for domestic value addition, this policy underscores the government’s commitment to nurturing a robust EV ecosystem. It heralds a new era of innovation and accessibility to cutting-edge technology and amplifies the ‘Make in India’ initiative. By incentivising local manufacturing and fostering healthy competition, this policy will not only accelerate the adoption of EVs but also bolster economic growth by way of reducing our reliance on imported crude oil and mitigating environmental impact, particularly in urban areas.”
Shamsher Dewan, SVP and Group Head – Corporate Ratings, ICRA: “According to the policy, a minimum investment of Rs 4,150 crore is required by the EV manufacturers, with a 3-year time frame for starting commercial production. This apart, a 25% localisation is expected to be in place by the third year, and this further increases to 50% by the 5th year to avail the lower custom duty of 15% on CKD units to the extent of investment made of Rs 6,484 crore, whichever is lower.”
“This move would help access global technologies, expand product range, and improve cost competitiveness, all of which would facilitate enhanced EV adoption. ICRA currently expects about 15% of new car sales to be electric by 2030. Further, countries that have been front-runners in EV adoption have also developed a local vendor ecosystem. This policy is a step in the right direction and would aid in increasing EV components localisation in India, which is currently at 30-40%.”
“Chassis components that require minimal technology upgradation are manufactured locally. There has been substantial localisation in traction motors, control units, and battery management systems over the years, while battery cells, which constitute 35-40% of the vehicle cost, are still entirely imported. This scheme gives rise to manufacturing opportunities for domestic auto component suppliers. For parts that are already used in ICE, there could be technological advancements in certain cases, resulting in higher content per vehicle. The e-PV component market is expected to be at least Rs 50,000 crore in terms of revenue potential for ancillaries.”
Raman Bhatia, Founder & MD, Servotech Power Systems: “Keeping a strong focus on prioritising domestic manufacturing and encouraging competition and growth, this policy will provide enough chances and harbour enough space to facilitate increasing the adoption of EVs across the nation and aligns with the ‘Make In India’ initiative promoting local production and job creation. This policy acts as a gateway for large-scale investments from global EV giants like Tesla, making India an EV manufacturing hub globally and providing the much-needed impetus for the local players to enhance their manufacturing capacities and adapt high-tech EV technologies. This healthy rivalry will drive innovation, reduce production costs, and ultimately benefit Indian consumers with a broader range of high-quality, affordable EVs.”
Mahindra & Mahindra issued a statement stating: “The recently announced EV policy for new entrants reinforces the Make in India momentum, with requirements of bank guarantees, minimum investment commitment, and local value addition. This will help accelerate the EV ecosystem in India.
Vikram Handa, MD, Epsilon Advanced Materials: “India’s new EV policy marks a pivotal moment in our nation’s journey towards sustainable mobility. We welcome this initiative wholeheartedly and are ready to support international EV OEMs like Tesla and others with our indigenous battery materials, effectively mitigating reliance on Chinese imports. This policy opens doors for collaborative innovation, driving India towards a greener, more self-reliant future in electric mobility.”
Nirmal K Minda, Chairman and MD, Uno Minda: “We welcome the government’s forward-thinking policy, poised to bolster India’s position as a premier manufacturing and EV hub. This initiative underscores the government’s dedication to realising its ambitious target of achieving net-zero emissions. By incentivising indigenous manufacturers to ‘Make in India’ and attracting investments from global EV giants, the policy takes a holistic approach to enhancing the automotive and EV ecosystem. Such measures are poised to propel EV adoption across the nation, paving the way for new avenues of growth within the sector.”
