India to draft new policy in push for EV investment, minister says

India’s commerce minister, Piyush Goyal, announced that the country is developing a new policy to attract electric vehicle (EV) manufacturers and foster increased investment in the sector. This announcement coincides with ongoing discussions between US EV maker Tesla and the Indian government regarding the construction of a factory in India. Reuters had previously reported that India was crafting an EV policy aimed at slashing import taxes for automakers that commit to local manufacturing, based on insider sources. Goyal revealed that consultations will be held with the industry to finalize the policy.

Goyal emphasized the government’s objective to attract more investment and promote expanded domestic EV production as quickly as possible. While he did not disclose the specifics of potential incentives, he stated that the benefits of the new technologies’ economies of scale will be realized as large-scale production is achieved.

In August, Tesla executives, interested in establishing a factory in India, met with Goyal. Tesla’s plan includes the production of a low-cost EV, priced at $24,000, which is approximately 25% cheaper than their current entry-level model, catering to the Indian market and export.

On Tuesday, Goyal remarked that Tesla aims to procure components worth $1.7 billion to $1.9 billion from India this year, signifying an increase from the $1 billion of components purchased in the previous year.