NEW DELHI: With an eye on attracting global auto giants such as Tesla in the high-end electric vehicles space, the government may put in place a phased manufacturing plan (PMP) type of scheme, which will cater to the requirements of the entire industry, while also building an ecosystem within the country.

Besides, incentives in this segment – which will meet domestic demand as well as create a base for exports – are to help develop capacity in a new segment, without affecting domestic players such as Tata Motors and Mahindra, which are investing heavily in the EV space, even as Japanese companies ply hybrids on Indian roads.
Discussions on a PMP that will provide for a graded duty structure to boost domestic manufacturing are at an early stage, but sources said that this could help fast track the transition towards EVs, while also tapping into an emerging industry. A PMP scheme would be company agnostic and cater to the needs of the industry, a senior official told TOI.

Tesla is looking to diversify beyond China, where it has a large base. Following his meeting with PM Narendra Modi, Tesla CEO Elon Musk has had at least one round of discussions with commerce and industry minister Piyush Goyal and he sounded upbeat on India.
Tesla has indicated that the company is willing to bring its entire ecosystem, including vendors, to India, officials told TOI. It is already sourcing goods worth around Rs 12,000 crore from India, sources said. During the initial rounds of discussions, government officials had told Tesla executives that the company could come through the PMP or FAME (faster adoption & manufacturing of electric vehicles) route.
As reported first by TOI on July 13, the company is looking to set up a factory to produce vehicles priced around Rs 20 lakh, with a capacity of around five lakh units. In recent months, apart from Tesla, other global majors such as BMW and Foxconn have evinced interest.
A few weeks ago, executives from BMW’s global team had met officials from the heavy industries ministry, where they had pitched for allowing duty-free import of EVs for three years, after which they intend to invest in a manufacturing facility. In case BMW fails to invest, the BMW team had indicated that the company would refund the duty benefits.
Earlier this month, the CEO of Mobility in Harmony, Foxconn’s EV platform, had said that the Taiwanese company, which is ramping up investments in the country, is looking to set up base either in India or Thailand for a three-seat vehicle that would be priced between $10,000 and $20,000 (Rs 8.5 lakh to Rs 17 lakh).
A phased manufacturing programme will help companies slowly step up indigenisation and some incentives would be provided to encourage investments.

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