Govt Adds R&D, Charging Infra to EV Manufacturing Scheme Boost

• The SPMPCI scheme now includes R&D and EV charging infrastructure investments.
• It offers a 15% import duty on EVs over $35,000, with investment and local value addition requirements.
• Several global automakers are interested, but Tesla has not committed yet.

The Indian government has modified its flagship Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMPCI) to recognize research and development (R&D) investments and charging infrastructure as part of the automakers’ total investment commitments.

These provisions, which were not updated in the announcement made in March 2024, will help attract global electric vehicle (EV) manufacturers and ultimately help the country build a viable ecosystem for electric mobility.

Kamran Rizvi, the Secretary at the Ministry of Heavy Industries, stated that when this scheme was originally launched in March 2024, the investment in EV charging infrastructure was not included as eligibility, but now both R&D and investments in charging infrastructure qualify. While the Production Linked Incentive (PLI) scheme does not include charging infrastructure, SPMPCI clearly includes charging infrastructure.

Also Read: Tesla Not Interested in Making EVs in India: Union Minister

In the updated criteria and guidelines for investments in SPMPCI, the eligible investments will recognize EV manufacturing equipment, R&D facilities, charging infrastructure (limited to 5 % of total investments), and land and buildings (limited to 10% only if part of the principal EV manufacturing site) as part of the eligible investment. Registrations of dual-use facilities (paint shops, assembly lines, etc., that supply both EV and conventional vehicles) also apply to the eligible investments.

The scheme achieves India's climate ambitions as well as adds jobs to the Indian economy since electric passenger vehicles only attract an import duty of 15% (which is generally at 70%) on each EV above USD35,000, on a maximum of 8,000 vehicles per year.

H D Kumaraswamy said, "We are not actually expecting from them Tesla. They are planning to start with showrooms. They are not interested in manufacturing in India, as per the information available with us today. The normal PN3 conditions of India will apply to investments from countries sharing land borders".

"Whoever wants to construct the factory, they have to invest ₹4,150 crore. They can do it in the same (existing) factory; only they have to make a new line specifically for EVs", he added.