Infra Investments Eligible For Incentives Under New EV Policy

SUMMARY

In particular, investments made for creating physical infrastructure such as machinery and plants, charging stations and other assets will also qualify for incentives

The report also added that up to 10% of the building cost can also be billed as an investment towards setting up EV-making capacity

The government announced the new EV policy called the Scheme for Manufacturing of Electric Cars in March

Even as OEMs and automotive giants have bemoaned the lack of clarity in India’s new policy to boost domestic electric vehicles (EV) manufacturing, government officials have reportedly given some indication on the potential focus areas for EV makers.

In particular, investments made for creating physical infrastructure such as machinery and plants, charging stations and other assets will also qualify for incentives, unnamed officials were quoted as saying by ET.

It is pertinent to mention here that the government announced the new EV policy called the Scheme for Manufacturing of Electric Cars in March.

“Qualified investment will be money spent on setting up plant and machinery, charging infrastructure, and also assets owned by the company which are not on its premises,” ET quoted government officials as saying.

The report also added that up to 10% of the building cost can also be billed as an investment towards setting up EV-making capacity.

This development follows the government’s consultation with the industry stakeholders, including representatives from global companies like Tesla, VinFast, Hyundai, Kia, Volkswagen, BMW and Audi as well as Indian carmakers like Maruti Suzuki, Tata and Mahindra & Mahindra.

The new EV policy allows reduced import taxes on original equipment manufacturers that commit to investing at least $500 Mn (INR 4,150 Cr) and establishing a manufacturing plant within three years. However, there was confusion about what such an investment needs to entail.

The centre is also said to be soon inviting applications from global EV players to avail the benefits of EV policy.

The ET report also claims that previous investments made by manufacturers won’t be considered under the new policy. This is pertinent because Vietnamese EV maker VinFast had enquired about the existing investments made by the company in India. According to officials quoted by the report, existing investments and ventures won’t be considered for the import duty exemption.

In January, VinFast inked a Memorandum of Understanding (MoU) with the Tamil Nadu government to establish an EV manufacturing facility in the state. Under the pact, VinFast has announced an initial investment of $500 Mn in the first phase of the project which will span a period of five years.

It is anticipated that the centre will allow EV players to apply for approvals under the new policy from July 31 or later.