Skoda, Volkswagen, Mercedes-Benz to manufacture EVs in India under Make-in-India push

synopsis

Skoda-Volkswagen and Mercedes-Benz plan to manufacture electric cars in India. They are prepared to make significant investments under the Make-in-India initiative and receive government incentives.

Major car manufacturers like Skoda-Volkswagen and Mercedes-Benz are reportedly planning to manufacture electric cars in India. Under their Make-in-India initiative, these companies are preparing to make substantial investments. As part of a scheme to promote the manufacturing of electric passenger cars in India, the Ministry of Heavy Industries will provide incentives to these companies.

This move comes at a time when the government is emphasizing the promotion of domestic manufacturing of passenger cars, with a special focus on electric vehicles (EVs). The government recently issued new guidelines for this purpose. The Ministry of Heavy Industries (MHI) will provide incentives under the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI).

To encourage global car manufacturers to invest under the scheme, approved applicants will be allowed to import electric vehicles with a minimum CIF value of $35,000 via Completely Built Units (CBU) at a reduced customs duty of 15% for five years from the date of application. According to the scheme’s rules, applicants are required to invest a minimum of ₹4,150 crore.

Reports indicate that the application window for automakers will be open for 120 days or more. The Ministry of Heavy Industries has the authority to extend the application window until March 15, 2026, if needed. Domestic companies like Tata Motors and Mahindra & Mahindra have already invested millions of dollars in local electric vehicle manufacturing and will continue to invest.

The government has devised this new scheme in line with the Make in India initiative to promote India as a manufacturing hub for electric cars. While companies like Skoda-Volkswagen and Mercedes-Benz are planning to manufacture electric cars in India, there have also been reports about Elon Musk’s American electric car company, Tesla’s manufacturing plant. In response to a question about Tesla’s entry into India, Union Heavy Industries Minister HD Kumaraswamy said the other day that Tesla is only going to start showrooms.

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