Tesla rolls in, but bumps stay on EV growth path

New Indian Express

2 days ago

The duty reduction in the India-UK deal focuses on nonelectric vehicles and does not encompass any out-of-quota cuts for EVs. That said, India's EV policy announced last year does walk an extra mile, lowering import duties from 100 percent to 15 percent for cars priced over $35,000, but with riders. To avail of these lower tariffs, companies must invest at least $500 million in local production facilities over a three-year period, besides achieving 50 percent domestic value addition within five years. In other words, the government is keen on attracting global automakers, but wants to ensure job creation and development of the domestic manufacturing ecosystem in return—which does not enthuse companies like Tesla.
This is not surprising given the pace of EV adoption in India. In 2024, they accounted for 7.5 percent of India's total vehicle sales, but two-wheelers accounted for over 60 percent of all EV sales. Overall growth is also dismal compared to major markets like China, where about half the new cars sold last year were electric. One of the drags on growth is that there are too few charging stations—only one public charging station for every 235 EVs, according to one estimate. Then there is a lack of standardisation among charging stations and connectors. Above all, India imports over 90 percent of its lithium-ion batteries and needs local manufacturing to guard against supply chain disruptions. We need to pave the road before EVs can truly vroom.