Auto Industry in India - We had a chequered Past, can we expect a bright future?

Looking beyond EV- Auto makers race ahead with Green fuel launches. Hybrids take over EV during last two months for the first time

After India’s New EV policy, Can Tata Motors , Maruti Suzuki Share price Crash?

An intersting analysis from the authors of equity masters.
In March 2024, the Indian government approved the new EV policy, under which import duty concessions will be given to companies setting up manufacturing units in the country with a minimum investment of US$ 500 m.

The companies that would set up manufacturing facilities for EV passenger cars will be allowed to import a limited number of cars at lower import duty. Duty of 15% would be levied on vehicles costing US$ 35,000 and above for five years.

Which means that India now has no restrictions on the import of electric vehicles from any country, including China, under a new EV policy.

However , in India Tata Motors is the market leader in EV cars - It has developed an ecosystem in India which is doing well at Present- Tata UniEVerse, is an ecosystem that will leverage group synergies, from companies such as Tata Power, Tata Chemicals, Tata Autocomp, Tata Consultancy Services (TCS), Tata Digital, Tata Elxsi and Tata Motors Finance.
And Maritu Suzuki with all proven capability in car industry since 4 decades has just started its work on EV.

Will they (both Tata Motors & Maruti Suzuki) be able to withstand the EV competition with foreign players like Tesla & many well established Chinese EV players .?
Read on the full story. you may ignore the promo’s in between.

The new policy allows import of just 40,000 EVs per manufacturer over a 5-year period i.e. at a rate of not more than 8,000 EVs per year. And that too on the condition of setting up a manufacturing base in India. Secondly this is for import of only high-end vehicles (USD 35,000 i.e. around Rs.30 lacs and above). Competition is bound to increase in the long run anyway (from the present), and this policy is just a small carrot to those who are anyway planning to enter the Indian market. I don’t think it is much of an issue for existing players.

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Union Minister Nitin Gadkari has sent a proposal to the finance ministry to lower tax on hybrid vehicles. This is a step in the right direction. Maruti Suzuki Chairman has been saying this for a long time that government should promote hybrid vehicles which solves the issue of range anxiety in EVs and will also help lower oil import bill. I don’t know why the government took so long to realise this. They should have promoted hybrid vehicles until the EV charging infrastructure was in place.

Proposal sent to lower tax on hybrids

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Agree. Hybrids have its own merits at this point of time. Lowering of GST on hybrids deserves consideration.
Unfortunately it is yet to get clearance from cabinet & GST council…i think we will have to wait until election .

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