Korean automaker Hyundai and Czech automobile manufacturer Skoda have expressed interest in investing under the Centre’s proposed scheme to promote local manufacturing of electric passenger vehicles. In contrast, Vietnam’s VinFast and Tesla are yet to respond, according to a senior government official.
“The scheme to promote electric vehicle (EV) manufacturing was announced. As of now, only Hyundai and Skoda are likely to invest while VinFast is unlikely. Both are interested in investing under the scheme while Tesla has not responded,” the official told Moneycontrol.
The government had sent out feelers to all Original Equipment Manufacturers (OEMs) in 2024, including Tesla and VinFast, but the two have not responded, the official added.
The SPMEPCI scheme
The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), which would provide incentives to companies setting up EV manufacturing units in India, was announced on March 15, 2024.
Under the scheme, applicants are required to invest a minimum of Rs 4,150 crore and achieve a domestic value addition (DVA) of at least 25 percent by the end of the third year and 50 percent by the end of the fifth year.
To incentivise manufacturers further, the government under the policy plans to slash import duties on EVs priced above $35,000 (cost, insurance, and freight) to 15 percent from the current rates of 70 percent or 100 percent, provided manufacturers meet the minimum investment and DVA requirements.
The government is likely to release detailed guidelines for the SPMEPCI scheme by February-end. Once the detailed norms are released, companies will be able to formally apply for benefits under the program.
The official emphasised that the government is not directly inviting any specific automaker but has extended a broad outreach to all OEMs.
Moneycontrol has sent out emails to Hyundai, Skoda, VinFast and Tesla. Their comments will be updated here once received.
Tesla silent on India plans
Tesla had earlier been in discussions with the Indian government regarding its potential entry into the country’s EV market. Although the company previously sought lower import duties before committing to local manufacturing, its lack of response to the government’s outreach raises questions about its immediate plans for India.
Tesla and SpaceX CEO Elon Musk met Prime Minister Narendra Modi at Blair House last week during the latter’s visit to the US. The high-profile meeting covered key topics, including technology, innovation, electric mobility, and India's expanding role in the global EV and space industries.
Hyundai Motor India Ltd (HMIL), which got listed on the Indian stock exchanges on October 22, has earmarked Rs 32,000 crore for the country between 2023 and 2032 as part of its growth strategy. The Indian arm of the South Korean carmaker will be making investments towards capacity expansion, product and platform development, and new launches.
Skoda launched Kylaq in 2024 in the sub-4 metre SUV category. “India is key to our internationalisation plans, the world’s third-largest car market, and SUVs make up 50 percent of new vehicle sales. We want the Kylaq to welcome new customers who are looking in this popular and fast-growing segment," Klaus Zellmer, CEO of Škoda Auto, had said in November 2024.
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