Key Points
India's new policy for electric vehicles, aimed at inviting the likes of Tesla to start manufacturing in India, ensures that the king of Indian EVs and the king of American EVs drive in separate lanes but Tata Motors and Tesla may race against each other in the luxury car segment...
Posing competition risk to a few of the upcoming models of M&M and Tata Motors at the upper end of the SUV market, the policy allows 8,000 units of electric vehicles above $35,000 (Rs 29 lakh) to be imported annually at lower duty of 15% vs 70-100% currently for 5 years against an investment of $500 million for local manufacturing...
The import of EVs below $35,000 would continue to attract import duty in excess of 70%, thereby protecting Indian OEMs operating in that price point...
"We believe since the volumes will be limited to 8k units, Tesla may want to focus on promoting higher-end models to take maximum advantage of duty benefits," Nomura's auto analysts Kapil Singh and Siddhartha Bera said.. Considering that India sold 42,000 luxury cars in 2023, the plan to import a maximum of 8,000 premium EVs per annum at a concessional rate will lead to a market penetration of about 20%...
Tiago's base model now starts at Rs 7.99 Lakh following a price cut of up to Rs 70,000.. Nomura analysts Indian OEMs have built strong competencies over the years and have demonstrated market share gains across segments vs global competition...
