Govt Planning New EV Policy With Aim To Increase Domestic Production And Investment, Says Commerce Minister Piyush Goyal

Union Commerce Minister Piyush Goyal announced the government’s plans for a new policy aimed at attracting electric vehicle (EV) manufacturers and spurring investment in the sector. This development coincides with ongoing discussions between US EV giant Tesla and the Indian government regarding the potential of establishing a factory in India.

India has been working on an EV policy that would cut import taxes for automakers that are planning to locally manufacture or assemble their products, Reuters reported citing sources with direct knowledge of the matter.

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Commerce Minister Goyal revealed that the government intends to consult with the industry while formulating the new policy. The primary objective is to increase investment and domestic production of electric vehicles (EVs). "We will come out with a policy," he said, adding that the government wants to attract more investment and increased domestic EV production as soon as possible. Goyal discussed the potential benefits of scaled economies resulting from large-scale EV production but did not disclose specific incentives at this stage.

As reported by Reuters, the Commerce Minister also said that Tesla aims to source components worth between $1.7 billion and $1.9 billion from India this year, having bought $1 billion of components last year.

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Tesla is strategically targeting the Indian market by focusing on a more affordable electric car, expected to be priced around Rs 20 lakh, significantly cheaper than Tesla’s current entry-level Model 3. This car will be manufactured in India for both domestic and export markets. Tesla executives recently held discussions with Indian government officials, and CEO Elon Musk expressed a keen interest in investing in India, including establishing a new facility, during Prime Minister Narendra Modi's visit to the US.