According to the commerce minister on Wednesday, India will develop new policies to entice electric vehicle (EV) producers and promote more investment in the industry. The remarks from Piyush Goyal come as American electric vehicle manufacturer Tesla (TSLA.O) and the Narendra Modi administration continue to discuss the idea of establishing a facility in India.
According to sources with intimate knowledge of the situation, Reuters reported last month that India was developing an electric vehicle strategy that would lower import levies for automakers that committed to some local manufacture.
Tesla’s comment on the EV strategy
When asked about the government’s plans, Goyal responded that the industry would be consulted on the new regulation. The administration wants to enhance domestic electric vehicle manufacturing as quickly as feasible and attract more investment, therefore he added, “We will come out with a policy.” Goyal stated, “As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies,” without elaborating on any potential inducements.
Senior executives from Tesla who were interested in constructing a factory in India met with Goyal in August. For both the Indian market and export, Tesla intends to build a low-cost electric vehicle priced at $24,000, which is about 25% less expensive than its current entry-level model.
Tesla, which spent $1 billion on parts last year, plans to purchase components from India this year in the range of $1.7 billion and $1.9 billion, according to Goyal, who made the announcement on Tuesday.
