India Reveals New Electric Vehicle (EV) Policy

After a protracted process, India has finally announced a new electric vehicle (EV) policy that will support the entry of international EV makers including Tesla, as well as other interested companies.

Related: Tesla Proposal Prompts India to Consider Import Tax Cut

Import taxes would be reduced on some EVs made by carmakers who pledge to invest at least $500 million. Furthermore, companies will be given a period of three years to set up local manufacturing facilities for electric vehicles and must ensure that at least 25% of the components are sourced from India by the third year, increasing to 50% by the fifth year.

Kona Image 2 800x445

Companies that meet these requirements will be able to import up to 8,000 EVs with a cost, insurance, and freight (CIF) value of $35,000 or higher per year at a 15% tax rate. This is a significant advantage because taxes on imported cars in India run between 70% and 100%, depending on their value.

Related: Prices of EVs in India to be Equal of Petrol Cars in 2 Years

EV imports at the reduced tax rate will be permitted for a maximum of 5 years. According to Reuters, the duty foregone would be restricted to the company’s investment or approximately $800 million, whichever is lower.

Notify of
Inline Feedbacks
View all comments