Paving way for Tesla? Govt may allow EV-makers to test market first via on-tap facility, says report

Tesla

The government may offer an on-tap facility to EV makers when it announces the guidelines for the revamped incentive scheme, the Economic Times has reported.

The detailed rules will provide an extended window to avail the scheme, allowing foreign automakers such as Elon Musk’s Tesla to test the Indian market before making required investments for the scheme, it said.

The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), notified in March 2024, aims to attract global automakers and strengthen India's domestic EV manufacturing ecosystem.

Under the scheme, applicants are required to invest a minimum of $500 million 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.

Once eligible for the scheme, the automakers will be charged lower import duty for a fully built EV manufactured abroad. Therefore, a car priced $50,000 can be imported at a reduced duty of 15 percent rather than the usual 100 percent. Automakers can import up to 8,000 EVs annually under the scheme.

The government is mulling extensive changes to the scheme amid buzz over Tesla's entry in the Indian market, the report said.

Also read: Guidelines for scheme to boost electric passenger car manufacturing likely by February-end

"The guidelines will be finalised in a fortnight and announced next month," the report quoted a senior government official as saying.

Moneycontrol couldn't independently verify the report.

Also read: Tesla’s India entry: Govt eyes role in global EV supply chain

The window to apply for incentives under the scheme could be open for 120 days or more. "The window can also be opened multiple times. So, an EV maker can test the market right now and then apply for manufacturing incentives at a later stage," the official added.

Tesla has posted several advertisements on LinkedIn for roles based in Mumbai, Delhi and Pune, signalling the entry plans for the electric car company led by Musk who recently met Prime Minister Narendra Modi during his US trip.

According to reports, Tesla is planning to open showrooms in Mumbai's business district of BKC and at Aerocity in New Delhi. It plans to begin its retail operations in India by April, CNBC-TV18 reported.