India’s new EV policy to set stage for TATA vs Tesla on Indian Roads
Government of India recently unveiled a new electric vehicle policy that would provide foreign EV makers like US-based Tesla & Vietnamese carmaker Vinfast with incentives to enter India's nascent electric car market.
India's new policy for electric vehicles, aimed at inviting the likes of Tesla to start manufacturing in India, ensures that the king of Indian EVs and the king of American EVs drive in separate lanes but Tata Motors and Tesla may race against each other in the luxury car segment.
Posing competition risk to a few of the upcoming models of M&M and Tata Motors at the upper end of the SUV market, the policy allows 8,000 units of electric vehicles above $35,000 (Rs. 29 lakh) to be imported annually at lower duty of 15% vs 70-100% currently for 5 years against an investment of $500 million for local manufacturing.
The import of EVs below $35,000 would continue to attract import duty in excess of 70%, thereby protecting Indian OEMs operating in that price point.
Estimates done by Nomura show that Tesla's starting on-road price in India for Model 3 (RWD) could be around Rs. 51 lakh and go up to Rs 1.2 crore for Model S Plaid. At these price points, Tesla will largely compete with luxury car OEMs in India as it does globally. "We believe since the volumes will be limited to 8k units, Tesla may want to focus on promoting higher-end models to take maximum advantage of duty benefits".
