Can India be a manufacturing base of electric vehicles and attract massive investment considering its cheap labor, incentives and other pro-business policies of the government? When Elon Musk’s meeting with Prime Minister Narendra Modi was canceled, it was rumored that he pulled out because he did not get the incentives that he wanted from India. Now, Union Road Transport and Highway Minister Nitin Gadkari has indicated to withdraw subsidy from the electric vehicle market due to increased demand and reduced cost. Will India miss the opportunity to ride on the wave of electric vehicles and dominate the world?
Gadkari: EV Sector No Longer Needs Subsidy
Participating in the Bloomberg NEF summit in New Delhi on Thursday, Gadkari said manufacturing of electric vehicles no longer needs to be subsidized by the government. Pointing out that electric vehicles already benefit from favourable taxation, he said that GST on EVs is levied at just 5%, providing a significant advantage over petrol and diesel vehicles.
Chinese EV Manufacturer BYD To Invest
The development has come at a time when Chinese EV manufacturer BYD announced its willingness to invest $1 billion in India, but the Government of India did not show any interest in the project. The authorities developed cold feet after Home & External Affairs ministries indicated their concerns over the entry of Chinese companies in the wake of the ongoing border tensions between the two countries.
MG, Great Wall Motors Too Want To Invest
BYD has entered into a partnership with Hyderabad-based company Megha Engineering and Infrastructures. But, the setback is not limited to BYD. Earlier, Great Wall Motors abandoned its Indian expansion plans. Another EV manufacturing company MG is also facing similar issues and is looking to get Indian partners on board with a majority stake.
Will Tesla Open Manufacturing Base?
Another EV major Tesla is also eyeing India as a big market as well as a manufacturing base. Tesla India Motor & Energy Pvt Ltd has taken office space on lease in Panchshil Business Park in Pune.
Earlier too, the Elon Musk-owned EV manufacturer tried to set up its base in India. When the Elon Musk-PM Modi meeting was canceled in April, it was said that Musk wanted to invest $20 billion in India, but he did not get the incentives he desired and he pulled out at the last moment.
NETA Coming To India?
If media reports are to be believed, Shanghai-based NETA Auto plans to invest in India’s EV sector, which is expected to account for over 40% of the total automotive market by 2030. NETA’s electric vehicles ranked among the top three in Southeast Asia’s new energy passenger car market.
