India to draft new policy in push for EV investment, the commerce minister said

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  • India will come up with a new policy to attract electric vehicle (EV) manufacturers and encourage greater investment in the sector. 
  • A news agency reported last month that India was working on an EV policy that would cut import taxes for automakers that committed to some local manufacturing, citing sources. 
  • Asked about the government’s plans, the minister said consultation on the new policy will be held with the industry. 
  • Tesla’s senior executives with an interest in building a factory in India met Goyal in August.  
  • Tesla plans to produce a low-cost EV priced at $24,000 – about 25% cheaper than its existing entry-level model – for both the Indian market and export. 
  • Tesla has combined a series of innovations to make a technological breakthrough that could transform the way it makes electric vehicles and help Elon Musk achieve his aim of halving production costs. 

India will come up with a new policy to attract electric vehicle (EV) manufacturers and encourage greater investment in the sector, the commerce minister said on Wednesday.

Piyush Goyal‘s comments come as U.S. EV maker Tesla continues talks with Narendra Modi’s administration on the possibility of building a factory in India.

A leading international news agency reported last month that India was working on an EV policy that would cut import taxes for automakers that committed to some local manufacturing, citing sources with direct knowledge of the matter. Asked about the government’s plans, Goyal said consultation on the new policy will be held with the industry.

“We will come out with a policy,” he said, adding that the government wants to attract more investment and increase domestic EV production as soon as possible. “As we get large-scale production, we will start enjoying the fruits of economies of scale of new technologies,” Goyal said without disclosing the nature of any possible incentives.

Tesla’s senior executives with an interest in building a factory in India met Goyal in August. Tesla plans to produce a low-cost EV priced at $24,000 – about 25% cheaper than its existing entry-level model – for both the Indian market and export.

Goyal said on Tuesday 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.

Tesla has combined a series of innovations to make a technological breakthrough that could transform the way it makes electric vehicles and help Elon Musk achieve his aim of halving production costs, five people familiar with the move said.

In a bid to extend its lead, Tesla is closing in on an innovation that would allow it to die cast nearly all the complex underbody of an EV in one piece, rather than about 400 parts in a conventional car, the people said. The know-how is core to Tesla’s “unboxed” manufacturing strategy unveiled by Chief Executive Musk in March, a linchpin of his plan to churn out tens of millions of cheaper EVs in the coming decade, and still make a profit, the sources said.

(With inputs from agencies)

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