Volkswagen and Mercedes have shown engrossment in locally producing their cars in a bid to take benefit of the lower excises on plan in the new electric vehicle (EV) policy, a senior government official said. Furthermore, the automakers are yet to take a decision on this.
“Several multinational corporations, like Mercedes and Volkswagen, that are currently operating in India, have expressed interest. The idea is that they would like to take advantage of the EV policy’s benefits to manufacture locally,” the official told Moneycontrol.
Emails requesting comments were not answered by the ministries of trade or heavy industries. Responding to an email, Škoda Auto Volkswagen India Private Limited stated, “At this juncture we do not wish to comment on the query.” Mercedes-Benz India remained silent.
Both German automakers are well-established in India, even in the absence of the EV regulation.
Mercedes-Benz is operating an electric vehicle manufacturing line in Pune and has invested over Rs 3,000 crore in the city, per a Moneycontrol article that cited a senior corporate executive. Volkswagen allegedly intends to construct the ID.4, its first electric vehicle for India, at its Aurangabad facility in preparation for a possible 2024 debut.
With a minimum investment of $500 million, or slightly more than Rs 4,150 crore, and the establishment of manufacturing facilities within three years with at least 25% of the components obtained locally, enterprises can benefit from import tax exemptions under the March 15 announcement of the EV policy.
Businesses who fulfill these conditions will be able to import 8,000 electric vehicles annually at a reduced tariff rate of 15% on vehicles priced at $35,000 and above. Depending on the vehicle’s value, India taxes imported vehicles between 70 and 100 percent.
Additionally, draft rules for the updated policy for EV makers are anticipated to be released soon by the Center.
The draft guidelines will include details regarding a Project Management Agency (PMA) that will be providing managerial and implementation support for the policy, as well as a portal, the official cited above said.
