Charging Up

Syllabus: GS-III, Subject: Economy, Topic: Industry and Industrial policies, Issue: Various Industrial sectors and policies and initiatives

Context: In response to union government’s new e-vehicle policy Tesla Motors is considering setting up a $2-3 billion electric car plant in India,

Key points of the new e-vehicle policy:

  • EV policy lowers import duty for companies investing a minimum of Rs 4,150 crore in manufacturing plants.
  • Policy sets localization targets: 25% by third year and 50% by fifth to enhance domestic value addition.

Key factors making India a attractive E-vehicle manufacturing destination:

  • India ranks as the world’s third-largest auto market.
  • Electric vehicle sales in India exceeded 1.5 million in 2023, led by two-wheelers and three-wheelers.
  • Government targets to raise EV share to 30% by 2030, unlocking substantial growth.

Significance of global player entering in EV manufacturing:

  • Enhances consumer choice and promotes competition in the EV sector.
  • It facilitates the introduction of latest technology and helps reduce carbon emissions.
  • Decreases dependence on oil imports, contributing to energy security.

The way ahead:

  • Crucial to monitor investment and localization criteria to prevent target relaxation.

Rapid ramp-up of charging infrastructure is vital for enhancing EV attractiveness.

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