Merc, Skoda-VW may make in India, Tesla to stay away: Musk’s electric car co only interested in setting up sales outlets, says Kumaraswamy

New Delhi: India Monday unveiled the guidelines for investment under its electric vehicle scheme that will allow carmakers to import 8,000 units at concessional import tariff if they set up a manufacturing facility in the country. The window for receiving formal requests will open soon.

Elon Musk’s Tesla is keen on setting up sales outlets but not to make cars in India while Mercedes Benz, and Skoda-Volkswagen, and Hyundai, and Kia have shown interest in manufacturing EVs under the scheme, Union Heavy Industries Minister HD Kumaraswamy said Monday.

“This will enhance India’s status as a global EV manufacturing hub… applications window for seeking sops to open shortly,” the minister said, adding that beneficiaries will need to start domestic production within three years.


Benefits under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) are contingent on a company agreeing to invest and manufacture EVs in the country. Approved applicants will be allowed to import Completely Built-up Units (CBUs) of electric four wheelers with a minimum import value of $35,000 at reduced customs duty of 15% for five years and would be required to make a minimum investment of Rs 4,150 crore.

POSITIVE RESPONSE
Europe’s Mercedes Benz, Skoda-Volkswagen (VW), South Korean Hyundai, and Kia have held talks with the Centre regarding the scheme, Kumaraswamy said shortly after norms for the scheme were notified.

“The future of mobility will be electric. SAVWIPL is closely monitoring the development of EV-related policies in India and is thoroughly assessing their implications. Based on this, we define the appropriate next steps in line with our longterm strategy,” a Skoda Auto Volkswagen India Pvt Ltd spokesperson said.

“We fully support and remain committed to initiatives that lead to a sustainable and self-sufficient battery electric vehicle ecosystem in India,” the spokesperson added. Mercedes, Kia and Hyundai did not respond to queries from ET on their plans with regard to the scheme.

TESLA
Tesla is said to be testing the waters for its electric vehicles (EVs) in India by importing some cars. The company has been in discussions with the Indian government and has in the past flagged its high import tariffs for cars. Founder Elon Musk was expected to visit India in April last year and announce the company’s plans, but the trip was called off.

Responding to a query on Tesla’s possible India plans, Kumaraswamy said the US-headquartered EV maker has not shown interest in manufacturing domestically. “Tesla only wants to open showrooms and sell imported cars,” he said.

TRUMP TARIFFS
Asked about the impact of US President Donald Trump's newest plan to raise import tariffs on steel, Kumaraswamy said it will have minimal impact on India.

Trump announced in May last week that tariffs on imported steel and aluminium will double to 50% after June 4. “The only concern is for consignments on the way since they will attract higher duty if they don’t reach before June 4,” he said.