India rolls out policies boosting EV manufacturing attracting global players

As India rolls out new policies aimed at boosting its position in Electric Vehicle (EV) manufacturing, the country’s secretary of Department of Promotion of Industry and Internal Trade has expressed confidence that these measures will attract more global players to the market. Rajesh Kumar Singh told CNBC last month’s initiatives would offer concessional tariffs for limited volumes of imports by EV manufacturers who commit a minimum investment of $500 million in India, as well as meet localization targets of 25% by year three and 50%. “It was meant for all global EV manufacturers and domestic manufacturers,” Singh said. While Tesla has been the subject of much buzz around these policies, Singapore highlighted that Vietnam’s VinFast has already announced its intent to establish an integrated manufacturing facility in Tamil Nadu with a projected capacity of 150,00 vehicles annually over five years for $500m (around £384.2m). With competition currently limited in India’s EV sector, the entry of major players like Tesla will level the playing field and provide much-needed stimulus to local manufacturers such as MG Motor India’s CEO Emeritus Rajeev Chaba who told CNBC that it is “a positive move”. According to Counterpoint Research, India’s EV sales nearly doubled in 2023 thanks largely to government initiatives and rising consumer interest. The consultancy expects EV usage levels to rise by two-thirds next year before reaching around one third of total passenger vehicle (PV) sales by the end of this decade – a target Singh called “realistic”. India’s lagging adoption rates for electric vehicles are strongly picking up in segments such as three wheelers and scooters, where EV penetration is now above 50%. “We already have one of the highest levels worldwide at close to 50% [for] three-wheelers,” Singh said. However, India lags behind other countries when it comes charging infrastructure; around two hundred commercial outlets catered for the nearly 200 thousand EVs currently in circulation according to IEA data – less than twenty in both China and America. Singapore is hopeful that battery charger networks will be far more extensive across major cities, as well as some highways within a couple of years or so. The secretary also highlighted ‘range anxiety’ – the fear an electric vehicle won’t have enough range to reach its destination – remains another barrier for EV adoption in India; however, he is hopeful that this will not prevent expansion and demand among consumers for fully-electric vehicles as technology continues to advance at a rapid pace.