"So far, Europe is unable to make affordable EVs. So the big opportunity for India would be to be able to sell EV compact cars at an affordable price, protecting profitability," Tavares, CEO, Stellantis
EkaLore has written about initiatives in Dynamic India for Make In India. In this release, we consider different aspects of the global energy marketplace transformation and the related transition to electric vehicles (EV) as it applies to Dynamic India.
Dynamic India has multiple initiatives (Make in India, National Electric Mobility Mission Plan, Faster Adoption and Manufacturing of Hybrid and Electric) during Challenging Times. India has become one of the world's top 5 marketplaces for vehicle sales. As a key vehicle marketplace, India is a priority market for EV manufacturers during the transition to new energy markets. The competition for selling consumer and commercial vehicles in India involves emerging global market participants and traditional manufacturers. In a long, complicated history, the successes of domestic Indian vehicle producers have been mixed (Mahindra, Tata, Ola, Hero) while growing with foreign manufacturing partners (Maruti/Suzuki (and Toyota), Leyland).
The transition to EVs presents an opportunity for India to become a global technology supplier and center of development while growing a new marketplace. The global competition to invest in new energy and EV technologies have already created technology development centers in India (Mercedes, VW, Stellantis (Citroen)) with increases in employment and inflows of foreign direct investment. Stellantis has said it believes that local sourcing might have to be at 90% of parts to be successful in India. VW's ongoing problems at Cariad also relate to not keeping to their announced schedule for a new software platform. Other foreign manufacturers look to gradually build their infrastructure to meet the needs in the Indian domestic market as local manufacturing operations (Toyota, SAIC (MG), BYD, Hyundai, Subaru).
The competition has already claimed some losses, with USA's GM and Ford withdrawing from the Indian marketplace. Tesla, although gaining globally, has not come to terms with the Indian government to bring their finished EVs to the Indian marketplace. During Q1 2023, the Indian government changed its previous import tariff schedules that assigned a very high tariff to vehicles without any assembly in India. Vehicles brought in for "final assembly" (as many luxury vehicles have been to date) saw tariff advantages under the prior schedules. EVs will also see a different tax and tariff treatment depending on the cost of the vehicle. Changes to state-specific or other plans are also pending. Likely, the changes in foreign production will see some adjustments (up and down) before the final schedules are effective. The effect this has on vehicles "Made in India" instead of imported for sale (like Tesla) is unclear.
If you'd like to read more about our analysis of Dynamic India you find those posts here at www.ekalore.com/india-business
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