The government of India is planning to attract investments worth $14 billion as a part of its under draft EV incentives scheme. Currently China manufactures most of the EVs produced in the world
The government of India has been on a roll announcing Production Linked Schemes centered around the manufacturing of electronics in the country. PLI schemes, ranging from mobile phones to telecom gear, have been announced encompassing thousands of crores as incentives. Now if the industry sources are to be believed than the country is also in the final stages of drafting a ‘policy on the similar notes’, as those of the ‘PLI’, for electric vehicles.
The news of the same has broke at the time when Tesla, one of world’s most selling electric vehicle car brands, has opened its first office in the country. Reuters even claims to have seen a document which says that the government of India is planning to attract investments to the tune of $14 billion. This, probably, would be a part of a broader auto scheme, and would focus solely on electric vehicles (EVs).
This new draft includes US$8 billion in incentives for carmakers and suppliers. This incentive, like most other PLI schemes, will be offered over a five-year period and will be aimed to drive large investments in the EV manufacturing space. Now, while the policy has not been announced yet, it is rumored that the EV companies will be able to file for incentives starting the first of April.
Like other PLI schemes recently announced in India, the one for EVs might also promise four to seven per cent government cash backs on the eligible sale and export value of vehicles and components to EV and component makers (other from EVs as well). There might also be an additional two per cent incentive for manufacturers of EVs and components that go into EVs.
The government of India is expecting that the scheme will attract an additional investment of US$14 billion and also help in creating around six million jobs. The same, if found to be true, might also generate revenues in form of tax to the tune of around $3.9 billion.
EV companies, applying for the scheme, will have to show growth of atleast eight per cent on a year to year basis. This condition is also very similar to the other PLI schemes. The amount of investment, per company, is not clear yet.
It is to be noted here that the government of India has already earmarked Rs 18,100 crore as approved financial outlay for implementing the PLI scheme in the Advance Chemistry Cell (ACC) Battery vertical. NITI Aayog and Department of Heavy Industries has been made the implementing agency for the same. Similarly, Rs 57,042 crore, was also earmarked as financial outlay for implementing the PLI scheme in the Automobile and Auto Components vertical. The Department of Heavy Industries has been made the implementing agency for the same.
“ACC battery manufacturing represents one of the largest economic opportunities of the twenty-first century for several global growth sectors, such as consumer electronics, electric vehicles, and renewable energy. The PLI scheme for ACC battery will incentivise large domestic and international players in establishing a competitive ACC battery set-up in the country,” read government’s official press note (when PLI was announced).