A top government official claims that two well-known German manufacturers, Mercedes-Benz and Volkswagen, have shown interest in starting local EV production in India.
This action seems to be a reaction to the nation’s recently implemented EV policy, which offers lower import duties to businesses who commit to large-scale local manufacture and investment. For vehicles valued USD 35,000 and higher, qualifying enterprises can import up to 8,000 EVs annually at a reduced 15% charge; this is a significant reduction over the regular import tax of 70–100%.
Despite having significant operations in India, neither Mercedes-Benz nor Volkswagen has formally disclosed its intentions with regard to the new regulation.
The strategy, which was unveiled on March 15, offers import tariff breaks to businesses that invest at least $500 million and set up production facilities within three years, sourcing at least 25% of their components locally. A spokesman for Mercedes-Benz India declined to answer what they called “speculations,” while a representative for Škoda Auto Volkswagen India Private Limited said they had no comments at this time.
Government New EV Policy
Mercedes-Benz currently has an EV manufacturing line in Pune and has already invested more than Rs 3,000 crore there. According to reports, VW is thinking about building its ID.4 electric vehicle at its Aurangabad facility in preparation for a possible introduction in 2024.
It is anticipated that the Indian government would shortly release the draft rules for the updated EV policy.
These guidelines should contain information about a Project Management Agency (PMA) that can help with installation and management, as well as facts about a specific portal. This move is a result of India’s efforts to decrease its dependency on imported cars and strengthen its domestic EV manufacturing capacity.
The goal of the government program is to transfer technology and draw in international investment to the quickly expanding electric vehicle market.
