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Tag: EV Policy

  • Maharashtra Approves New EV Policy With Infra Push and Tax Waivers

    Under the leadership of Chief Minister Devendra Fadnavis, the Maharashtra Cabinet has approved the new electric vehicle (EV) policy 2025. The new policy aims to increase the state’s manufacture and use of electric mobility.

    The policy will be in place till 2030 and will be implemented with INR 1,993 Cr during the following five years. According to a media report, the new EV policy will waive tolls for certain electric vehicles travelling on highways. In addition, subsidies will be offered for the purchase of these vehicles in an effort to reduce air pollution.

    According to the article, Fadnavis stated that the state government has authorised a new EV policy that will provide incentives for passenger EVs. The state should see a rise in EV production and usage.

    Additionally, the policy prioritised the adoption of the clean mobility transition model by providing incentives to individuals who transitioned to electric vehicles until 2030.

    Charging Infrastructure will be Strengthened

    According to the CM, the new EV strategy would also boost the state’s charging infrastructure and put charge stations on national highways every 25 kilometres.

    Under the new policy, electric two-wheelers, three-wheelers, private four-wheelers, buses operated by the state transport corporation, private buses and transport projects run by civic organisations will all be eligible for a 10% purchase price reduction.

    This apparently follows the Delhi government’s consideration of providing a purchase subsidy of up to INR 30,000 for the purchase of two-wheeler EVs as part of its future Electric Vehicle Policy 2.0.

    Centre to Shorten Time For EV Subsidy Settlement

    According to reports, the Ministry of Heavy Industries (MHI) intends to cut the 40-day processing period for EV subsidy claims to just five days. The Centre aims to resolve technical bottlenecks and expedite verification procedures in order to carry out such a move.

    Under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) programme, the government is taking this action in an effort to reduce the backlog and guarantee the prompt distribution of EV subsidies.

    There is already a massive backlog of 126,000 pending subsidy claims for 2024–2025. There are 109,000 claims for e-2Ws alone out of 893,000 claims altogether.

    Face authentication concerns have been blamed for these delays since buyers’ appearances may differ from their Aadhaar images, which makes identity verification difficult. One of the MHI’s main initiatives to hasten EV adoption and build out supporting infrastructure nationwide is the PM E-DRIVE Scheme.

    The programme will replace previous programmes like FAME and EMPS-2024 and has a budgetary investment of INR 10,900 CR. It will run from October 2024 to March 2026.

  • After US Tariff Clarity, the Centre May Modify EV Manufacturing Policy

    According to reports, the Centre is willing to change its Scheme to Promote Manufacturing of Electric Passenger Cars in India (SMEC) in light of the results of previous free trade agreements and the Bilateral Trade Agreement (BTA) with the United States. The March 2024 announcement of SMEC has not yet been implemented.

     The plan allows authorised EV manufacturers to establish production plants in India for EV four-wheelers with a $500 million minimum expenditure. The programme also imposes a 15% tariff charge on imported EVs.

    The government may change the policy to draw in international manufacturing companies if the BTA talks result in 15% import auto tariffs and targeted investment amounts, according to a media report.

    India and US in Discussion Regarding Proposed BTA

    The planned BTA, which will cover tariffs, non-tariff barriers, and customs facilitation, is presently being discussed between the US and India. In order to facilitate trade, both nations will be expected to reduce or do away with customs tariffs if the agreement is implemented.

    In addition, India is negotiating free trade agreements with a number of nations, including Belgium, Norway, and the United Kingdom.

    Main Goals of the SMEC

    The SMEC programme seeks to entice international EV producers to put money into India’s expanding EV sector.”

    The initiative would also help place India on the world map for manufacturing EVs, generate employment, and meet the goal of “Make in India”, the government had stated when the scheme was announced last year.

    In addition to minimum investment amounts and import tariff rates, the programme mandates that manufacturing facilities achieve a minimum domestic value addition (DVA) of 25% and be operational within three years of the Ministry of Heavy Industries’ (MHI) approval date. After the facility is set up, the corporation should reach 50% DVA in 5 years.

    Even though the programme is gaining popularity worldwide, industry titans like VinFast and Tesla continue to struggle with India’s high EV import tariffs.

    Tesla’s CEO Taneja India’s Current Tariff a Major Roadblock

    The current tariff structure in India, according to Tesla’s CFO Vaibhav Taneja, is a barrier to the company’s entry into the Indian market.

    It is important to remember that imported cars valued at more than $40,000 (more than INR 34 lakh) CIF (cost, insurance, and goods) are subject to a 100% tariff in India. Additionally, by the end of June this year, Vietnamese EV giant VinFast plans to build its India unit in Tamil Nadu.

     With an initial commitment of $500 million over the first five years, this plant is a component of VinFast’s $2 billion investment in the nation.

  • Government to Cap Investment in Charging Networks Under New EV Policy

    According to reports, the Center’s soon-to-be-notified electric vehicle (EV) policy will require foreign automakers to allocate just 5% of their overall foreign investment in the nation to the development of charging infrastructure. The measure is intended to guarantee that EV manufacturers invest more in vehicle manufacturing rather than charging infrastructure, according to draft regulations obtained by Reuters.

    Therefore, the extra money spent by foreign automakers will not be considered an investment in the nation if they spend more than the 5% criterion. According to the 47-page draft paper dated January 2025, expenditures made on charging infrastructure will be taken into account up to (a) 5% of the promised investment. For those who are unaware, the government essentially gave international EV giants like Tesla a free pass when it introduced the EV policy last year. Under the new proposed regulations, global automakers who invest at least $500 million (INR 4,150 crore) in the construction of an Indian unit can import EVs with import charges of only 15% to 20%, as opposed to the existing 110%.

    What New Rules State?

    According to recent media reports, EV manufacturers cannot get around the anticipated EV regulations by only investing in charging infrastructure. In order to increase manufacturing in the nation, they will need to invest more money in manufacturing. The call is being taken because the government wants businesses to focus on production rather than just charging networks, according to a media report.

    However, the Centre is now discussing the draft guidelines with EV manufacturers and other interested parties. The guidelines should be finalised by the end of next month. In order to qualify for reduced import charges on up to 8,000 electric vehicles annually, the new regulations also require EV manufacturers to generate a minimum turnover of $577 million by the end of their fourth year of business, according to the report. Businesses must reach the $866 million minimum barrier by the fifth year of existence. A penalty of 1% to 3% of the income deficit would be imposed on original equipment manufacturers (OEMs) that do not exceed the turnover requirement, according to the proposed regulations.

    Tesla is all Set to Explore Indian Market

    This coincides with preparations to re-enter India being initiated by Elon Musk’s Tesla. According to reports earlier this week, the US-based EV company has decided on two showroom locations in Mumbai and Delhi NCR. The EV manufacturer is also seeking to hire skilled workers to strengthen its attempt to re-enter India.

    In the upcoming months, the business is reportedly getting ready to sell a few thousand electric vehicles to India. According to rumours, the corporation is negotiating the establishment of a plant in states like Tamil Nadu, Maharashtra, and Gujarat. To entice the corporation to the state, the Andhra Pradesh government has also provided incentives including “ready” land tracts. In addition to Tesla, other international automakers including Hyundai and Toyota Motor are considering plans to produce EVs in the nation at both their new and current factories.

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    StartupTalkyNitin Konde