After China proved itself as a leader in EV production, another Asian country is becoming a center for carbon-neutral vehicle manufacturers. According to the latest information, India could be one of the developing countries that wants to be a leading player in the production of electric cars.
The country has devised a strategy for the development and production of electric cars, although it initially focused specifically on Tesla, which it invited to invest in the construction of a gigafactory, but the American manufacturer has focused on Mexico. However, the announcement of the new President of the United States, Donald Trump, that he will introduce additional tariffs on vehicles imported from Mexico gives India an opportunity to renew negotiations with Tesla. The American manufacturer has already suspended the construction of a factory in Mexico.
The suspension of Tesla Model 2 production in Mexico was the main motive for Musk to go to India, but Prime Minister Narendra Modi canceled the meeting. The Indian government intends to launch its electric car production plan in March 2025, which Tesla and other major manufacturers see as a new opportunity. The plan is to expand aid to existing manufacturers rather than restricting benefits to new plant construction. India is ready to help any manufacturer that invests at least $500 million in electric vehicle production with 50 percent of components sourced locally. The government is also offering a 15 percent import tax cut for up to 8,000 electric cars a year.
Toyota and Hyundai have already shown interest, although it is not known whether they would use existing plants or build new ones. Hyundai already knows that the €500 million spent on research and development will not be included in the total investment, so the Korean company is waiting for the final guidelines for its electric car plan in India.
Volkswagen, which already has plants in India, wants to know if it could spend 75 percent of the total investment in the first three years, rather than the entire $500 million at once. Also, if VW decided to use its factories in Pune, they would have to install new lines separate from those for the production of combustion engine cars.
Source: Reuters
