India To Invest $4.6 Billion To Lure EV Battery Makers In The Country
Recently, California decided to ban the sale of gasoline-powered vehicles from 2035 onwards. As more and more countries are moving towards the use of electric vehicles, India is also planning to join the race for electric vehicles.
As reported by Reuters, the Indian government is planning to offer $4.6 billion as incentives to companies for setting up battery manufacturing plants in the country to push a move towards electric vehicles.
One of the major reasons behind shelling out such a huge sum is to reduce the country’s dependence on oil.
A proposal drafted by Niti Aayog, the government think-tank committee chaired by the PM himself, states that the move towards electric vehicles could help India save as much as $40 billion in oil imports by 2030 if the country adopts electric vehicles.
The government is planning to offer $4.6 billion as incentives over the next decade to companies manufacturing EV batteries.
The proposal recommends offering $122 million as cash and infrastructure bonuses starting from next year onwards and increasing the bonus amount gradually until it reaches the limit of $4.6 billion.
The draft also mentions that the Indian government wants to uphold the 5% import tax rate on EV batteries until 2022 and post that it will increase the rate to 15% for pushing local manufacturing of EV batteries.
This could prove to be a good sign for battery maker companies like Panasonic Corp, LG Chem, and automakers like Tata and Mahindra who have seen unsatisfactory sales of EVs in the world’s most populous country.
The draft proposed by Niti Aayog aims to boost annual domestic demand for battery storage to 230 gigawatt hours from the current demand of 50 gigawatt hours over the next decade. Similarly, it will also push the market size of EV battery manufacturing companies from $2 billion to $14 billion by 2030.
As per a senior government official who wishes to be unnamed, the Modi government will review the proposal over the coming weeks.
In another related news, Elon Musk’s Tesla is in talks with Karnataka government to set up a R&D plant in the state.
