Not meeting expectations

• India has introduced a concessional import duty of 15% on fully built-up units, contingent on EV manufacturers investing ₹4,150 crore over three years to localize manufacturing in India.

• The scheme, under the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI), allows for a maximum import of 8,000 completely built units annually for each manufacturer for five years.

• However, these policies do not address the pressing issue of technology transfer in India’s journey to decarbonise and transform mobility.

• China’s New Energy Vehicle subsidy programme in 2009 and mandatory joint venture manufacturing of EVs enabled technology transfer.

• The U.S.’s Advanced Technology Vehicles Manufacturing Loans Program, initially $25 billion, was expanded under the Biden administration’s Inflation Reduction Act.

• India could aim for a 25% DVA under the scheme by repurposing locally made auto components meant for ICE vehicles to EVs and layering it with Software-as-a-service.

• To obtain the crucial technology for the heart of the EV — its battery — India must replicate its approach to localising ICE manufacturing.