Synopsis: A drop in EV import duties, according to the South Korean automaker, will enable carmakers to import more clean-energy vehicles into India and develop a viable EV ecosystem.
In India, the electric mobility space is fast expanding in response to rising environmental concerns and alarming levels of air pollution.
The electric two-wheeler category, on the other hand, is growing at a quicker rate than the electric car segment; the market is saturated with electric two-wheeler possibilities from small to large scale manufacturers, but there are just a few electric automobiles on the market in India.
This is primarily due to the high cost of electric vehicles, which is a significant barrier to their adoption. The cost of electric vehicles can be reduced by increasing local manufacturing, which will improve sales and promote the adoption of electric vehicles.
However, because there is currently limited demand for electric vehicles in the country, most automakers are hesitant to make large investments in local EV production. Instead, they intend to evaluate demand by bringing in foreign autos to test the waters. As a result, some automakers have asked the government to lower EV import tariffs.
Tesla made this demand a few months ago, when its CEO, Elon Musk, stated that India’s import duties on electric vehicles are the “highest in the world,” ranging from 60% to 100%. He requested the government to reduce the federal import tariff on electric vehicles to 40%.
Hyundai, like Tesla, has requested the government to lower import levies on electric vehicles in the country. A drop in EV import duties, according to the South Korean automaker, will enable carmakers to import more clean energy.
Vehicles into India and develop a viable EV ecosystem. Hyundai believes that EV imports will help carmakers establish some market in India before they are able to localize EV components, according to a PTI report.
The automaker also stated that it is developing a mass-market electric vehicle for India, but that this will take time. Meanwhile, lower import tariffs may make it easier to bring EVs to India.
In addition to lower import duties, the government’s increased investment in charging infrastructure and further support for carmakers (including under the FAME scheme) would help the electric four-wheeler category flourish in the country.
To roll out electric vehicles in India, the South Korean automaker is considering two options: finding a local partner or bringing a global partner here.
S S Kim, MD, and CEO, Hyundai Motor India, said, “If we have some meaningful support, even for the private customer, that would be very helpful. Also, the tax reduction will be great for the customer. If the demand is there and the market is starting to grow, I think that in two years we can reach a meaningful point in terms of scale, and from that point, we can manage.”
