Indias New EV Policy to Propel Local Manufacturing of Premium Electric Cars

In a significant move to boost the electric vehicle (EV) ecosystem in India, the government has recently introduced a new EV policy aimed at promoting local production, particularly of premium electric cars. Andre Konsbruck, Vice-President of Sales Overseas at Audi AG, lauded the initiative during an interaction in Ingolstadt on March 19, highlighting the government's commitment to sustainability and the electric future.

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Konsbruck pointed out that India stands out as perhaps the first market to implement a regulation specifically targeting premium electric vehicles. This strategic focus is expected to fast-track the localisation of such vehicles, thereby stimulating demand within the country. The policy includes import duty concessions for companies that commit to setting up manufacturing units in India with an investment of at least USD 500 million. This move is designed to attract leading global automotive players, including Tesla from the United States.

Under the new policy framework, manufacturers of EV passenger cars will benefit from the ability to import a limited number of vehicles at a reduced customs/import duty of 15 per cent on cars priced USD 35,000 and above. This incentive is valid for five years from the issuance of the approval letter by the government. Currently, imported cars as completely built units are subject to customs duties ranging between 70-100 per cent, based on various factors including engine size and cost.

Konsbruck also emphasized the strategic importance of the Indian market for Audi, predicting that the premium segment could reach sales of 1 lakh units annually by 2030. Audi plans to adopt a flexible strategy in India by offering both internal combustion engine models and a broad range of battery electric vehicles. This approach aims to cater to evolving market demands effectively.

When queried about Audi's plans for local manufacturing of battery electric cars in India, Konsbruck mentioned that various scenarios are currently under evaluation, expressing hope for a decision in the near future. Audi India presently imports its entire EV lineup, which includes models such as Q8 50 e-tron, Q8 55 e-tron, Q8 Sportback 50 e-tron, Q8 Sportback 55 e-tron, e-tron GT, and RS e-tron GT.

The German luxury carmaker has set an ambitious target for its operations in India, aiming for electric vehicles to constitute 50 per cent of its sales by 2030. This aligns with Audi's global strategy to transition into a fully electric vehicle manufacturer by 2033. The new EV policy by the Indian government represents a pivotal step towards achieving these objectives, promising a greener and more sustainable automotive landscape in India.