In a bid to promote the manufacture of electric vehicles in India, the government plans to offer $4.6 billion worth of incentives to companies by 2030 to set up advanced battery manufacturing facilities, Reuters reported.
Referring to a draft proposal by NITI Aayog, the report said the government looked to slash oil import bills by up to $40 billion by 2030 if EVs gain widespread adoption.
These would include cash and infrastructure incentives of 9 billion rupees ($122 million) in the next financial year which would then be ratcheted up annually.
“Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry,” the proposal said.
While the import tax rate is 5 per cent for certain types of batteries, including batteries for electric vehicles, this would only remain so until 2022, when it would be increased to 15 per cent thereafter to promote local manufacturing, the document said.
In June last year, NITI Aayog had proposed banning the production of two and three-wheelers powered by internal combustion engines by 2025 and 2023—a stand that was later dropped. Union Minister for Road Transport and Highways Nitin Gadkari had earlier stated that the aim was to make India fully electric by 2030, with only electric vehicles to be sold after that date.
Further, in 2019, Livemint reported that the government had planned to set up at least four Tesla-style giga factories to manufacture batteries at an investment of around $4 billion.
The news of the $4.6 billion incentive plan comes after reports that Tesla Motors, the world’s leading seller of electric vehicles, is in talks with the Karnataka government for the setting up of an R&D centre in Bengaluru. Notably, lithium reserves of up to 14,100 tonnes were recently discovered in a patch of land in Karnataka’s Mandya district—a potential booster shot for the battery industry in India, which is among the world’s largest importers of lithium.
As per the Rs 10,000 crore Faster Adoption and Manufacturing of Hyrbdi and EV (FAME-II) scheme which the Union Cabinet cleared in April, through incentives and development of public transport, the aim is “support 10 lakh electric two-wheelers, five lakh three-wheelers, 55,000 four-wheelers and 7,000 buses" and set up 2,700 charging stations across metros, million-plus cities, smart cities and cities in hilly states across India.