Like most of the world’s countries, India is working on policies to motivate the masses to invest in electric vehicles. The government aims to offer new incentives to carmakers making electric vehicles a part of its broad automotive sector scheme. India expects to attract at least $14 billion in electric vehicles’ investments in the coming five years from industry sources. It is working on promoting electric cars and reduce their dependency on oils. Also, the plan is to help achieve the net-zero emission target. However, there are current challenges in the field, including low demand, lack of investment, and the existing incentives’ nature different from state to state.
The new automotive plan is currently under discussion, which officially began in mid-2020 to give a more focused approach to electric vehicle production and adoption. It includes an $8 billion budget on suppliers and carmakers’ incentives for every five-year to provide massive investment in the automotive industry. The public should expect to help more of this scheme this month will more details, but the companies will have access to these incentives from the beginning of April.
Companies in the automotive businesses will get 4 to 7% of the government’s cashback on the export value and eligible sale of the cars and their components. However, for electric vehicles and the companies, the government offers 2% more, unlike traditional cars, to act as a growth incentive and promote electrification. The pioneer of electric vehicles, Tesla, is working on entering India entering India’s electric market while other competitors, including Volkswagen, Ford and Tata Motors from India, are planning on investing in electric vehicles to match the strict global emissions policies.
The document also highlighted that the automotive components’ developers must work hard to match up with production to deal with the country’s shift to electric vehicles. This automotive incentive plan is a part of the country’s $27 billion programs to attract manufacturers and create a stable global supply chain in electric cars. However, companies debuting their launch in India are bound to challenges, including power tariffs, steep interest rates, high costs, and poor infrastructure makes it hard to function in India compared to other countries like Vietnam and Thailand.
However, this scene introduces financial incentives to overcome these problems and help the country match its competitors. The policymakers expect that this move will bring an additional $14 million to the table, create 5.8 million job opportunities and deliver over $4 billion in tax revenue in five years. There are conditions for manufacturers stating that they must meet minimum global revenue, $1.4 billion, while automakers generate $69 million annually. This move represents India’s strategy plan change to promote the automotive industry and improve their management capabilities.