India will launch a new EV policy for international companies like Tesla

The market for electric vehicles (EV) has grown rapidly in the last few years. India, one of the largest automobile markets, may soon invite applications for a new policy aimed at bringing international electric vehicle makers. In this policy, these companies will be offered less import duty on manufacturing EVs in the country.

This policy was announced last year. It offers to reduce the duty on imported electric vehicles up to $35,000 to 15 percent. However, to take advantage of the import duty exemption, the EV company will have to invest a minimum of $500 million in setting up a factory in the country within three years. A Bloomberg News report quoted sources with knowledge of this as saying that applications for this can be opened this month.

International EV companies like billionaire Elon Musk’s Tesla are preparing to start business in India. However, Musk has expressed displeasure over the high import duty on vehicles imported into the country. The arrival of international EV companies in the country will also increase competition for Indian automobile companies. Tata Motors has the highest share in the EV market. However, the financial eligibility conditions for companies taking advantage of this policy have been made strict. In this, the EV maker will have to achieve a minimum revenue of Rs 50 billion in the fourth year of its business. The company not fulfilling this condition will have to pay up to three percent of the difference in revenue as a penalty.

Vietnam’s VinFast has also confirmed the launch of its VF6 and VF7 in the country. Both these electric SUVs have been designed and developed in Vietnam. Changes will be made in these SUVs according to Indian conditions. VinFast has said that bookings for VF6 and VF7 will start in June. The company’s factory is being set up in Tamil Nadu. The factory will be operational in the next few weeks and will have an initial annual capacity of around 50,000 units. The company showcased its electric vehicles at the Bharat Mobility Global Expo held earlier this year. The company is trying to increase its sales in Asian countries instead of expanding in North America and Europe.